In response to my post The Future of MLS Is Now, Joshua Harris commented:
Michael, I see your point… and ask why does there have to be cooperation to have aggregation? (hey, that’s kind of fun to say) Google is aggregating w/out cooperation? Why is there this need to “play nice in the sandbox†when it comes to real estate. As if playing nice is the only way to get listings or data, which leads to consumers. I think we need a big kid to come into the “real estate sand box†and bully some of these big real estate companies around! Maybe the problem is in the word “aggregateâ€, we should begin a trend to replace aggregate with “crawlâ€.
This comment raises many good questions about search engines (like Google), deep data surfacing, copyright, and data standards. As important as these questions are, though, I’ll save them for another day, because I think there is a more fundamental question, namely, if there were no MLS aggregation of listings, what decisions would individual brokers and agents make regarding advertising listings? Put another way, without the cooperation the MLS fosters, would the competitive requirements of individual brokers and agents result in the listings being advertised in any one place or would they all choose different places? My guess is that, without some form of cooperation, competition would drive them to choose different venues, resulting in no aggregation.
Now, perhaps Google or some other entity could crawl all the broker sites, but the broker’s objective is to rise above their competition and so they aren’t likely to be amenable to simply turning control of their advertising efforts over to crawling. Competitors want more control than that. Moreover, without some standards for listing aggregation, crawling alone isn’t very effective, which is exactly why Google created Base. Listing data needs structure and structure requires standards and standards require cooperation.
This basic requirement, cooperation among competitors, is what so many revolutionaries coming to the real estate space have seemed to ignore. The DOJ, for example, in the guise of protecting competition, ignores that cooperation is required to create the asset (listings, especially those aggregated) over which everyone is now fighting. Those complaining that the listings database(s) should be opened far and wide forget that the listings are in the databases in the first place based on a very limited agreement to cooperate, which never had anything at all to do with advertising. The challenge afoot is re-defining the cooperative agreements to now include advertising, and the DOJ and other revolutionaries should be helping to preserve that cooperation instead of insisting that it isn’t necessary.
[...] at least historically. A huge part of the infrastucture in residential real estate is the cooperation that allows for the aggregation of the listing data into what becomes a new copyrightable compilation that has enormous value to [...]
Russell, I’m honored by your comment! I’ve been following your writing and podcasts on Bloodhound and think your contributions back to the community are exactly what’s great about the web and RE.net today — peers learning from each other in real time.
Michael, Thanks for mention. I still feel the need to go back to a Google example… Google aggregates data, again without cooperation, and still creates competition. This competition simply resides within the site itself. Companies are competing, and paying BIG bucks to do so, through SEO. Is the same possible in the real estate industry???
Joshua, read the link in the post about Google’s deep data surfacing strategy. The point of that article is that there is a lot of information in databases that is not easily or at all crawled. So, the simple answer to your question is, no, the listing data in MLS or broker databases is not easily ripped off by Google. And, yes, I chose the term ripped off intentionally, because, even though I didn’t address it in detail in the article, the reality is that the compilation of listings is a copyrighted work, and so Google can’t simply take it without permission. Recognizing this, Google created Base, the sole purpose of which is to “surface” structured information like listings. Base is a “cooperation” model in that people need to submit information into it.
With that in mind, the question then becomes whether competitors will ALL agree to submit information into Google Base. My point in this post is that, without some other process to create cooperation among competitors, the answer is no. Some competitors will intentionally not upload into Base because they feel they’ll get more attention for their listings if they only have them on Trulia or their own web site or Craig’s List or whatever. The point is that the job of a competitor is to differentiate themselves, and they will choose different marketing options in order to do that. The result is that the listings will not be aggregated in any one place.
To take your SEO example one step further, let’s say that listings are subject to SEO and the quest becomes getting listings to rank high on Google. By definition, only so many can show up at the top. When competitors see their information NOT showing at the top, they’ll seek out alternatives, and the result will be disaggregation.
This isn’t something unique to the real estate industry, either. It’s a myth that Google has “everything”. There is a ton of data that Google doesn’t aggregate. A good example is stock exchange information, which they get from the NYSE and NASDAQ. I’ve often suggested that the stock exchanges are a good model for how the MLS industry could operate, and, in those models, the data regarding trades is a very valuable asset that must be purchased by those wanting to license it.
How has the FSBO market become so successful? There is Zeeroh cooperation, a great deal of competition, and plenty of, lets get back to the point of all of this, SOLD HOMES, which would be the reason for listing data, the real estate industry, MLS, Trulia, and this conversation.
Cooperation of data does not create the asset, the home itself creates the asset, and this doesn’t change because of the method in which the listings are aggregated.
Also, I love it when anyone in the real estate industry throws out the “copyright” flag. Michael, you think the government is now going to protect the exclusivity of a real estate listing through an outside stretch of the use of copyright law. (be sure and include “compilation” when referring to the copyright of listings, lol) The DOJ has got the real estate industry “bent over its knee” with the sole purpose of preserving competition in this industry for the betterment of the consumer. Now, the real estate industry is going to look to the government for protection of the listings that the DOJ is trying to open up! I feel like e-mailing this post to Patrick Fitzgerald (if you know this name then you know where the industry is going) I’ll let him know that the DOJ has won the battle with the NAR, because now the industry has resorted to copyright infringement to guard listings rather than the usual traditional vs. Internet brokerage argument.
It’s OVER! Get out of the way of the transaction! Is what I say to any realtor, broker, the NAR, and the MLS.
The consumer has wanted change in this industry for a long time, and because the industry did nothing, the government , yes the very gov’t you are now going to be looking to for protection, needed to step in and force this change.
Joshua, by referencing FSBOs, you make my point; show me one FSBO site where all the FSBO listings exist. How does FSBO listings here, there and everywhere, but not all in one place, help the consumer?
is it potato or potato, only works when you say it. these arguments about doj,nar,mls,discount brokers,fsbos etc only work when you speak in hushed tones around a camp fire late at night. lets let the only arbiter of justice prevail:the market. people who can do everything themselves and have time will go with least resistance:less agents,less choices,less paperwork.most of the ones i have talked to about buying property without an agent have a very solid belief in their own capacity,whether justified or not.in most states this will work. alabama is a caveat emptor state. you can google or wikipedia so those people from other states and nations moving here had better know what they are doing or have a good prayer chain going.lawyers will close what ever you want. i saw a judgement from a few years ago in circuit court where a homeowner gave up her right to use the only way out of her 1 acre plot which was a deeded easement.for the past 2 years this widow has not had a legal way to leave the house. she is now having to buy what a judge let her ,without representation,give away. so let the really knowledgeable go ahead an buy without representation,just remember being stupid is not a protected class under any law.elmer fudd is at work here: be afraid be verrryverry afraid( of your own shadow) doj is only stepping in because some agents only represented their commission and not the principals or principles in each case. bye bye
3:01 pm
Michael,
Your analysis and grasp of the situation is just excellent! Most impressive, sir.