Next RE Web2.0 challenger - Edgeio
Posted by Pat Kitano at 11/30/2006 7:45 PM 
Categories: Technology, Realty Realities, Cool Web Tools, The Future
Categories: Technology, Realty Realities, Cool Web Tools, The Future
Following up on new Web2.0 Real Estate sites, Edgeio enters the fray with its acquisition of Adaptive Real Estate Services ("ARES"). Venture Beat and Joel at Future of Real Estate Marketing do a fine job reporting how beneficial ARES is to Edgeio's real estate search capabilities by providing access to listings at 70 top MLS systems nationwide.
Simply put, here are the two reasons why this acquisition was made:
1) For a website to be able to list properties from a specific MLS system, the website owner, whether it is a broker or agent, needs to belong to that MLS system. ARES has developed these local relationships with these brokers and agents by selling them real estate websites, and by extension, can then "access" these MLS systems through these websites.
2) More importantly, in layman's terms, ARES has developed a "data integration platform" (not an entirely correct term in the jargon of data professionals, but it will suffice) that allows a Realtor to enter MLS listing data into their familiar local system and have that data repopulated uniformly and automatically across the other MLS systems in ARES' network.
Here are four strategic questions that come to mind:
ARES craftily used their Realtor relationships from its real estate web design business as "Trojan Horses" to access the multiple MLS systems. ARES' data integration/automation platform - the real meat and potatoes of the acquisition - was "painstaking" work to build; and thus, constitutes a barrier to entry... but...
1) I spent one year, 2001, developing a web-based data integration company and know that now, five highly advanced years later, MLS data integration can't be that tough an assignment... compare the integration of the finite data fields from 70 MLS systems to the data integration of a Fortune 500 company with hundreds of products, departments and geographical locations. For MLS data integration, the devil in the details lies in accomodating outlying field names - for example, I have heard Seattle's MLS has a checkbox for lakefront and oceanfront property locations, Nebraska's wouldn't. Don't mean to belittle the work of ARES... but I bet a corporate data integration shop like Accenture or Informatica could, given access, build the same ARES "plug and play" system and interface within two months max. Data professionals out there, prove me right or wrong about this...
2) Second, can other companies who build relationships with Realtors, say, in the RE web design business like Point2Agent or Ubertor, learn from the ARES business model? That MLS data automation platform sure seems like "secret sauce" and would add value to these companies.
3) Why didn't Trulia and the other national Web2.0 sites look at ARES as an MLS access play? Is it because they are going to develop their own broker/realtor network that would provide such access? Were they not thinking strategically enough to recognize how a company marketing a different product - web design software - could help them access MLS systems? Now that Edgeio/ARES is a done deal, the national Web2.0 sites now must focus on similar MLS accessing strategies to compete.
4) Joel made a good point about the fickleness of the individual, independent MLS systems... what happens when Edgeio and other multiple MLS accessing applications add the FSBO listings? Note that ARES may or may not (I don't know) have tight relationships with the MLS systems themselves, rather ARES has relationships with the Realtors whose websites provide access to the MLS interfaces. The MLS systems may be disgruntled with their Trojan Horse relationship with ARES.
I'm assuming the hope is once "quasi-national MLS standards" in the form of the new Edgeio's begin to appear, individual MLS systems won't want to opt out as renegades against the FSBO listings because their constituents won't allow their system to retreat from the national exposure for their listings.
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In sum, the ARES acquisition is an immediately useful data play for Edgeio, but can they incorporate MLS listings nationally and gain traction as Edgeio, which is currently not a brand name real estate destination. And can they do it before the other Web2.0 competitors cobble together their own solution now that they see the need for multi-MLS access to compete?
Followup story: One Problem with Blog Journalism / Revisiting Edgeio
Technorati tags MLS MLS listing Edgeio real estate real estate search mashups web2.0 real estate technology real estate marketing Adaptive Real Estate Services ARES trulia idx Venture Beat
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12/1/2006 8:20 AM
Realtio wrote:
There are a lot of great real estate blogs out there. I will be featuring different blogs on our blog roll as we go along. One of my favorites is Transparent Real Estate by Pat Kitano. Pat says: "It's our...
Quite frankly, I'm surprised Trulia didn't go this route and chose to develop direct relationships with the brokers themselves. But, if the MLS' get their collective knickers in a twist about this sort of aggregation and cut off access to the IDX feeds - maybe they made the right move. Go straight to the source and cut out the middle men.
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Great post. I agree it is interesting that many companies think it's a lot of work integrating multiple MLS's into a nationwide network. Some are trying though. It's the core of HouseValues new strategy.
The big franchise networks already have this reach of course. RE/MAX (powered by eNeighborhoods) is one example of a nationwide MLS aggregation site already in existence.
One question comes to mind: Does the consumer really care if the search site is national or local?
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Thank you Ola, and all the best with your new blog Realtio...
I forgot to mention the big franchises do have national MLS aggregation just by default from their national network of brokers. Your Housevalues note is also interesting, you seem to have some knowledge in this arena, I'd be interested in know more about your expertise.
Finally, I also believe most consumers don't care about national search... for startups like Trulia who are national, they'll need the national MLS access just to effectively serve the needs of the localities they cater to.
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Pat...I have to say thank you again for your posts...I don't comment all the time, but you know I read and value your opinion and research tremendously!
Thx again!!!
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Always thanks to you Jeff ... we're a mutual admiration society!
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As usual you hit the head on this one! Thanks for your insight Pat!
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Hi Pat,
All real estate is local. My clients don't care about other places. I respect the idea of aggregating the data, and some believe that Google is quietly working on this, but my clients don't care about what is going on outside of their radius of a home search. Unless the search capabilities developed allow the end user to drill down smoothly, quickly and accurately who cares? The key here is accuracy. Realtor.com aggregates but the information is often not accurate and we spend a lot of time trying to explain to clients why that listing is on realtor.com but isn't on our website, and that is after we have had to search for the specific listing! BTW, this can, at times, take a lot of time because MLS numbers are wrong, areas are wrong, data is wrong. I wonder, how do these things get listed with incorrect data, but they do....
One of the best local aggregators, in my opinion, is Movoto.com. They are slick integrating great data for the end user including a CMA type page. Takes some of the work away from us, but gives the buyer some empowerment in decisions that are, at times, pretty scary for them. I'm for empowering the end user.
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My reaction:
1) Real estate is local; hence real estate search also is, for the most part. Realtor.com has national reach, but in markets where there is a more compelling local option (like here, with reil.com) Realtor.com is at best a distant second.
2) There must be something about the ARES and Edgeio relationship and business model that I'm not getting. As I understand it, a company like ARES that signs an agreement with an MLS to get a feed and re-distribute that feed is only allowed to do so with respect to its own clients, not to an aggregator. In other words, ARES could set up an MLS search service that I as a Realtor could host on my own site...but I don't think ARES would be allowed to syndicate that information nationally.
3) Setting up these data feeds is, to my understanding, largely a question of tediously "mapping" all of MLS X's data fields to the data fields of the aggregator. There are some 900 MLS's nation-wide, and it sounds like ARES has selected to work with only the biggest ones to get the most bang for their buck. The real time consuming item in such an operation is not the technology, but the politics.
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Nice to hear you Lenore... you and Kevin speak correctly about real estate being local.
I've published further analysis on the Edgeio/ARES transaction that address your fine questions.
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ARES would not be allowed to use the MLS data in any other fashion than for the original real estate web design client.
I do these data integrations for Realtors all the time and not one MLS wants its data "out in the wild". If an MLS caught ARES mis-using its data, their "feed" would be stopped.
The primary benefit Edgeio would get by acquiring ARES would be the technology and/or business capability to process disparate data feeds.
The road to aggregating MLS data requires you acquire your own brokers licenses and join each MLS under your single company banner. Then aggregate the data following any non-commingling rules. (e.g. forcing searchers to select a geographic area before seeing results)
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You're right about MLS integration being easier than many enterprise projects, but two months very optimistic. In my life before real estate, leading integration framework development at Oracle and startups, the biggest "challenge" was the creativity of developers implementations when they built their underlying data structures.
Let's take a visual example. We might all agree that, at a high level, all MLS systems do the same things and store the same types of data. But every MLS system also has a vastly different user interface for looking up properties, displaying pictures, running summary reports, etc.
Take that visual and extend that to the back end. Every MLS uses a database, and those databases have different performance characteristics that developers optimize for.
An example for readers who aren't techies is a date. You never store dates in a database as "1/2/2007" or "2-Jan-07" because it's slow for computers to sort that type of text when retrieving listings. Dates are usually stored as integers starting from zero. Now what does zero mean? Well, that varies from vendor-to-vendor and programming language to programming language: Jan 1, 1900, etc.?
And in order for that simple little date to get displayed on the MLS, there's a developer who has to know what database is being used with which programming language, along with how people want to read the date (e.g. "1/2/07" or "Jan 2, 2007" or even "2/1/07").
When you publish an integration framework, the success of that framework depends on minimizing the gymnastics (i.e. time and money) developers need to go through to massage their data to fit your framework.
My real concern from this disintermediation and reintegration is that the consumer won't have access to quality property histories with all the proliferation of places to post listings and then aggregate them back again.
Every time you transform data, you play a computerized version of the telephone game. And by putting this information everywhere, you make it harder for people to locate the source of truth.
The NAR should have taken a more open stance to begin with (since agents should be interpreters, not gatekeepers of information).
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Realtor.com aggregates but the information is often not accurate and we spend a lot of time trying to explain to clients why that listing is on realtor.com but isn't on our website, and that is after we have had to search for the specific listing! BTW, this can, at times, take a lot of time because MLS numbers are wrong, areas are wrong, data is wrong.
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There must be something about the ARES and Edgeio relationship and business model that I'm not getting. As I understand it, a company like ARES that signs an agreement with an MLS to get a feed and re-distribute that feed is only allowed to do so with respect to its own clients, not to an aggregator. In other words, ARES could set up an MLS search service that I as a Realtor could host on my own site...but I don't think ARES would be allowed to syndicate that information nationally.
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