According to information obtained by Realty Times, Realtor.com is discontinuing its XLerator(tm) feature, a lead-matching system designed to provide "blind" lead generation opportunities to participating agents.

XLerator was designed as a free lead-matching feature for Realtor.com customers who purchased the company's Websites, formerly known as I-LEAD pages. The way it worked was that consumers could remain anonymous while posting their "profiles" to Realtor.com to seek a Realtor or to ask for information about a neighborhood, the marketplace, etc. Realtors who purchased an I-LEAD page were given the opportunity to go to the profiles and offer their assistance, information about listings, make proposals, and so on, to capture the anonymous consumer as a client/customer.

A product of its day, XLerator was designed to compete with a new breed of online lead generation services which "matched" agents and consumers. In most cases, agents competed at a disadvantage. Even if they were able to get a client, they often obtained one at a high cost, as other companies had already trained consumers to make Realtors compete for the business and ask for reduced commissions or other concessions.

At the time, we wrote an article about XLerator when it was part of a series of value-adds that Realtor.com was experimenting with to bring more sales to its I-LEAD packages. Then, we said:

"XLerator is significant because it makes Realtor.com accountable for leads as long as agents understand that consumers are sharing their search information voluntarily. But again, Realtor.com does not have first mover advantage. HomeGain has grown to number five in overall real estate traffic online and is currently the largest referral service online. But where Realtor.com has the advantage is that its business model is based on selling I-LEAD pages, not referrals, so Homestore plans to offer the referrals free of charge to I-LEAD Realtors only. HomeGain, a licensed brokerage, collects referral fees when participating consumers close their homes using a HomeGain-referred agent.

"While the value add-ons (like XLerator) are strong enough that they can convince some agents that the I-LEAD packages are worth buying, Homestore may have to bring them to market at a loss in order to sell more Web pages in order to beat the competition.

And how that will accomplish higher revenues in the end is anybody's guess."

And so it didn't, because it was never a destination product, and never marketed as such.

While some failure for XLerator has been blamed on technical problems that went uncorrected in an overwhelmed Homestore/Realtor.com system, some failure can also be placed on simple lack of understanding.

It's expensive enough to market products you make money on. It's simply not good business sense to market a product that is offered as an add-on when the primary product has been changed.

In the spring of 2003, Realtor.com changed its business model and reinvented itself. No longer a lead generation company, Realtor.com wanted to be recognized as a leading media company. Instead of leads, the company sold exposure, making it the American continental version of a local newspaper - a place where brokers and agents could advertise themselves along with their enhanced listings.

About the same time, Realtor.com began to face a serious threat from a new competitor - LendingTree - who, like HomeGain, wanted to charge referral fees at closing to Realtors in exchange for providing them leads.

While HomeGain targeted agents, LendingTree went after brokers with great success enabling brokers to pass the leads through their relocation networks. LendingTree quickly built a network of over 600 brokers in less than a year, making it serious competition to HomeGain.

Only recently, Homestore/Realtor.com leadership has been pondering charging for lead management via subscription or some alternative payment method to referral fees so that the company can continue to distinguish itself as different from its competitors.

And that's why this latest news is interesting. Despite the expense of paying alternative business models between 25 percent and 35 percent for closed leads, which seems successful enough to support a burgeoning number of lead referral companies, Realtors curiously showed little support for Realtor.com's XLerator product which was presumably processing similar types of leads at no additional cost.

Realtor.com, tied down by Homestore's operating agreement with the NAR, isn't allowed to charge referral fees on the back end for closed leads. But that could change if enough brokers and agents demand to be able to get paid leads from Realtor.com.

Clearly, it's all in the marketing. With the right message, other companies have gotten agents to pay them for what Realtor.com was willing to give away for free.

No wonder Realtor.com is ditching XLerator. The lack of appreciation from Realtors alone is enough to warrant pulling the plug.

But the opportunity to implement a paying system is an even better reason.

Published: June 2, 2004

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.