I wrote yesterday why NAR’s RPR won’t mean the death of the MLS. Today, I want to ask some more important questions regarding the terms on which MLSs will allow NAR’s RPR to use (license) their MLS data. I suspect NAR will be presenting a lot of MLSs with some sort of terms of use over the next few weeks and months, promising their members “free” access to the RPR in exchange for their MLS data. There is some basic information on a fact sheet NAR posted about RPR (thanks, Kevin McQueen!) but the fact sheet doesn’t provide many details.
If I were negotiating this terms of use, I’d want to know answers to at least the following questions:
I understand a press release will be coming later today, but my guess is that the press release will be more hype than details. The real facts will come in the proposed license agreements NAR tries to get MLSs to sign. I think a system like RPR has a ton of opportunity for MLSs to make their members more efficient, but the key to leveraging the RPR opportunity will be in the license agreement for the MLS data. RPR won’t amount to much without the MLS data and so that value should be recognized by the brokers and agents in the MLSs providing the data.
Update: Here’s NAR’s press release for November 9. Not much different from the fact sheet except that CAR is going to partner with RPR with their ZipForms and Relay transaction management systems. I’ll probably post more about that later.
I’m very excited to announce that the Tucson Association of REALTORS® MLS (TAR/MLS), representing approximately 6,000 members in Ariziona, has selected FBS and our flexmls Web System for their next MLS system. The TAR/MLS Committee and Board of Directors engaged in a very thorough review of the major MLS vendors and concluded unanimously earlier this week that FBS and the flexmls Web system was the best company and system for them.
From a company perspective, getting the opportunity to work with the staff and members at TAR/MLS is a huge win for FBS. TAR/MLS will be one of FBS’s largest customers and furthers our goal to provide great service to MLSs of all sizes. From a personal perspective, I’m excited to get to work with such an incredibly well-run organization. Getting to know and work with Wes Wiggins, Brian Case, Scott Weidamoyer, Andy Gordon and others at the MLS has been great and we’re all excited to get to work together on the conversion.
I’m also excited to get to work with the forward-thinking Board at TAR/MLS. I’d like to give a special shout-out to Director John Mijac who, with Wes Wiggins and staff, put in hundreds of hours (or more) leading the group evaluating the various vendors. I’ve gotten to know John pretty well over the last several months and found him to be exacting and exhaustive in his research and presentation skills. John left no stones unturned in his review but, if he had, they would have been uncovered by President Kim Clifton, who conducted one of the most detailed executive interviews I’ve ever been through. I left that meeting incredibly impressed with Kim, and plenty exhausted as well. Jim Adams from Long Realty also dug into our RETS services and related processes to ensure that we had the right tools to feed the back-office and other systems they and other brokers require. Overall, the entire Board was thorough and objective in their review and we learned a lot from their professional review process.
Getting to work with all these great people is what makes this business so rewarding. The months ahead with all the conversion work and introduction of a new system to the members of TAR/MLS undoubtedly will be made much easier because of the great people involved. All the employee-owners of FBS sincerely thank the leadership at TAR/MLS for trusting us with such a great responsibility, and we look forward to living up to your expectations!
Wired posted an article called Should Web Giants Let Startups Use The Information They Have About You that touches on many of the topics dear to the FBS Blog, especially the terms of use on which data should be shared. Here are some key quotes:
The Internet these days is supposed to be all about sharing. Thanks to a common commitment to open access and cooperation, the data mashups that have defined the Web2.0 phenomenon have exploded. . . .
But beneath all the kumbayas, there’s an awkward dance going on, an unregulated give-and-take of information for which the rules are still being worked out. And in many cases, some of the big guys that have been the source of that data are finding they can’t — or simply don’t want to — allow everyone to access their information, Web2.0 dogma be damned. The result: a generation of businesses that depend upon the continued good graces of a relatively small group of Internet powerhouses that philosophically agree information should be free — until suddenly it isn’t.
When data is put in a silo and application developers have to develop on top of that data repository, the power to change the rules for access is critical:
Such vulnerability to sudden data blackouts illustrates why some potential investors get nervous about funding scraping-dependent businesses. “Anybody who is a supplier to you has power over you,” says Allen Morgan, a venture capitalist at the Mayfield Fund who has invested in a raft of Web 2.0 companies, including Tagged, a teen social network and Slide, one of the most successful makers of Facebook applications. Morgan says that as those data providers help power more applications, they take on the role of operating systems — with a vested interest in consolidating their power. “Inevitably, they will feel compelled to compete with application developers in order to grow their business — and it’s an unfair fight.”
The article concludes wrongly, I think, in favor of the scrapers, when the reality is that what needs to occur is a three-way agreement among the data providers (in the case of MLSs, that’s the brokers), those wanting access to the data (third-party applications), and the MLSs or other entities aggregating the data (data repositories). All bring value to the equation and enabling interoperability and data exchange is key, but that requires mutual agreements on the terms on which such data exchange occurs.
Dan Woolley writes over at Tzetze Fly about how easy Google makes querying their search results programmatically using Google’s various search APIs. Following on my post yesterday about terms of use, I thought I’d check into Google’s terms of use for the search API. This is relevant for MLSs, because there are many who suggest that agents and brokers should make their data more readily accessible, just like Google.
Here are a few of the more important terms of use:
Basically, Google is preserving the integrity of their search results as well as their ability to make money off your use of the search results by including advertising. They also are preventing you from making money off the search results, although I was surprised that there wasn’t a provision restricting others from placing advertising on the same page as the search results. Perhaps Google feels this is covered by the requirement that the search results cannot be the “primary content” on the page. In other words, if you are placing ads on your site, and also including Google search results, the ads better relate more to your content than Google’s.
The most interesting use of Google’s API to date I’ve seen is Mahalo, which is competing directly with Google in the search space. Mahalo is human powered search, where there are a bunch of people assembling search result pages for common search terms like Britney Spears Comeback Single. But if you type in anything unusual, like Wurzer, you get a message saying, “We haven’t written a page for Wurzer yet” and then “Here are more results from our friends at Google”. Is this then the “most prominent” content on the page? I’d love to see what would happen if Mahalo became popular and started putting ads on these pages with Google search results.
Back to broker listing data: Does Google’s terms of use provide a good model for how brokers, agents and MLSs could or should make listing data available for others to use?
REIS Innovations, a subsidiary of the Florida Association of REALTORS®, has produced a very interesting and useful document outlining the terms of use policies of many web sites to which real estate agents and brokers submit their listing and other data. Terms of use are easy to blow off, and many times doing so is justifiable from a risk/benefit perspective. In other words, the cost of digging into the terms of use far outweighs anything bad that could happen as a result of agreeing to the terms. This may well be the case for an agent submitting a few lisitngs to a web site for advertising purposes. But is it also true for a company submitting their entire listing inventory to a site? What control do you want to have regarding what can be done with the data once you submit it?
This is the third in a series of posts about negotiating software license contracts, initiated by our mistakes with GeoJet. The first post explained why it’s important to plan up front for short-term extensions at the end of the contract in the event you need time to transition to other software. The second post suggested an alternative to one-sided jurisdiction provisions. In this post, I’ll take on arbitration clauses, a favorite of the ’80s but not a good idea today.
A lot of template contracts will contain a provision that requires that disputes be resolved through arbitration instead of or at least before going to court. The theory is that courts are too time-consuming and expensive, so some alternative is necessary. Arbitration is said to be less expensive and quicker, because the rules for discovery (where you get to ask the other side questions before the trial or hearing begins) and evidence are less burdensome and you can hire private judges with better schedules for your needs.
The problem is that the different rules create a lot of unpredictability and so, over the years, more and more rules have been added to the arbitration process, such that it now is often just as complex and expensive as litigation. At the same time, differences remain in the rules and so the results of arbitration are often dictated by the arbitration panel more than the evidence. For this reason, when I was practicing law, we often joked that the “arb” in arbitration stood for arbitrary.
For these reasons, I always try to avoid arbitration provisions in software license contract swhenever possible. Instead, I recommend that the contract require mediation first, and then, if that fails, go directly to court. Mediation is basically where an independent third party is brought into the picture to try to help the parties find a middle ground to resolve the dispute. If that fails, though, there is little point to fussing around with arbitration, which will just waste time and money. Instead, let the parties slug it out in court and hope the threat of the expenses brings everyone to their senses so they can resolve the dispute early.
If you find yourself forced into an arbitration provision, at least try to make sure that the arbitration panel selected has expertise in both software law and software creation, if possible. These are both specialized areas and the result of the arbitration will be much better with experts in the subject matter.
Earlier this week, I posted about our woes in dealing with GeoJet at the end of our contract, and that has given me the idea of doing a short series of posts on this topic. I’ve negotiated our MLS software license with over 100 different MLSs and I’ve been told consistently that our contract is one of the easiest to understand and negotiate that they’ve experienced.
Part of the ease of negotiating, I suspect. is that I do it myself and so have authority to modify the contract, without having to go through a long bureaucratic process. Also contributing, however, is the fact that our core contract is only eight pages long and the exhibits add another five pages. It’s simply easier to understand and negotiate a shorer contract.
Most importantly, however, is that, as we’ve learned from past negotiations, we modify our base contract to adjust to the most common result. I think this is unusual. Most companies simply keep battling over the same provisions, over and over again, or employ a take it or leave it approach, but that doesn’t make sense to me.
For example, previously, our base contract required that any litigation over the contract occur in our home state of North Dakota. This is called a jurisdiction provision and is very common. However, this provision was challenged every time by clients, wanting jurisdiction in their home state. With many attorneys, this provision was a battle royale; they simply had to have it their way, which usually made me dig my heels in even more, too.
Some time ago, however, I was negotiating this provision and the other side suggested that jurisdiction favor the defendant. In other words, whoever is bringing the suit has to do it in the other’s home court. Brilliant! A provision that discourages litigation and is balanced for both parties. Ever since that negotiation, we now include it as part of our standard contract. Why battle over a provision that has a good, well-balanced solution?
Next up, we’ll talk about arbitration provisions, and why I hate them.
