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What The Microsoft-Facebook Deal Means For Real Estate — Part 2: Revisiting Move.com Vs. ActiveRain

October 26th, 2007 · 9 Comments

Yesterday I, among many others, commented on the Microsoft-Facebook deal — though in my case, I’m more interested in the potential impact on real estate than I am in the specifics of the deal itself.  While yesterday’s post thought through the implications for real estate consumers in the mid-Peninsula, today I have some thoughts on the implications for real estate professionals, and in particular the ongoing legal brouhaha between Move.com and Active Rain.

A quick recap:  Move.com, the 800-lb gorilla of the online real estate world, was apparently in negotiations to buy ActiveRain, the 50,000-member strong real estate blogging site.  The price tag was rumored to be around $30M.  ActiveRain is now suing Move.com for allegedly reneging on the deal.

The $30M price tag certainly raised eye brows.  The BawldGuy himself wondered aloud in a comment on my first article on the issue whether ActiveRain was even worth $1M.  My back of the envelope calculation — based on the fact that Facebook was roughly valued at $250/user – suggested an argument for a $12.5M valuation for ActiveRain.  Yesterday’s news upped the ante for Facebook to around $300/user, implying ActiveRain may have a value of $15M.

Back to Microsoft-Facebook for a minute.  What does Microsoft see in Facebook?  Simple — it has the potential to become a finely honed online advertising machine, in which Microsoft can target users’ interest with pinpoint precision — not (as is currently the case with search engines) simply by what the user is searching for, but rather by what the users’ interests, group memberships, and friends’ list implies about his or her interests.  You’re a member of the groups “San Francisco” and “Wine afficionados?”  Perfect — we’ll serve you up with an ad for a weekend getaway in Napa.

What does (or did) Move.com see in ActiveRain?  Perhaps one of (at least) two things:

1) Yet another venue to rape pillage plunder charge agents for the Web 2.0 equivalent of “Enhanced Listings.”  Want to have a blog?  That’s free.  Oh, you want to actually be able to write something in your blog and have pictures, links, and comments?  That’ll be $4.95/month.  Want to get rid of competing agents’ ads next to your blog articles?  Another $4.95/month, please.  Want to “enhance” your blog so it shows up higher in a search on Active Rain?  $9.95.

2) A finely honed online advertising machine, a la Facebook, but specifically within the real estate industry.  Again, ads could be tailored according to the users’ group memberships and friend lists.  You’re a Coldwell Banker agent, and a member of the “Boise interest group”?  We’ll serve you up an ad from a competing Prudential franchise in Boise that’s looking to expand.  You’re reading an article comparing some of the different MLS search providers?  Bingo!  We’ll show you an ad advertising such wares, along with a one month free coupon.

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Tags: Active Rain · Facebook · Industry · Microsoft · Move.com

After Active Rain vs. Move.com, What Next?

September 30th, 2007 · 5 Comments

The ongoing Active Rain vs. Move.com dustup, our very own ongoing soap opera saga, illustrates one fact above all else: the re.net is maturing. As the traditional players in real estate (finally) begin to appreciate the potential of emerging technology in real estate, it’s inevitable that more acquisitions will take place — hopefully successfully.

Move.com’s overtures to Active Rain were actually not the first in which a traditional player courted one of the new ones. That honor, I believe, rests with our very own Joel Burslem of FOREM, which was acquired by Inman a number of months ago.

Some other possible pairings? Google must be looking with interest at both Zillow and Trulia. Inman, Ris Media, and other real estate industry news sources may be eyeing some re.net blogs.

And who knows…maybe the Bloodhound will make a play for one of the other Phoenix re.net blogs? Or perhaps these guys might be interested in this one?

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Tags: Active Rain · FutureOfRealEstateMarketing.com · Google · Industry · Inman · Joel Burslem · Move.com · Trulia · Zillow

Just How Many Social Networking Sites Does One Industry Need?

September 29th, 2007 · 20 Comments

Fresh on the heals of the Active Rain vs. Move.com dispute comes news of at least 2 — that’s right, count ‘em — TWO!! — more real estate-focussed social networking sites.

The boys of Sellsius, refreshed after a cross country RV trip and then a fishing vacation, just put out a press release about an upcoming site called BeatYouThere.  Well, I beat it over there, and this is what I saw:


Fortunately, I then came across a site named Listolia being not-so-subtly promoted in the comments of Michael Arrington’s not-so-inerring post about Realtors suing Realtors.  I scurried over and this is what I found:



Let’s see…We’ve got Zillow.  We’ve got Trulia Voices.  We’ve got Active Rain.  Move.com is/was trying to get into the fray.

Hey, I’ve got an idea:  Let’s start a real estate social networking site where we can talk about real estate social networking sites!  We’ll call it … hmm … RealEstateSocialNetworking.com.  Nah.   Taken.  (I’m serious!)  How about SocialNetworkingAboutSocialNetworking.com ?  Any takers?

Seriously, folks, this train has left the station.   I don’t know how many social networking sites the real estate industry actually needs.  The established ones (listed above) have some serious critical mass already, and it’s not clear that yet another one would have a chance of catching up, unless it offered a really compelling hook that nobody else did.


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Tags: Active Rain · Industry · Move.com

Active Rain vs. Move.com…Ok, Enough Already! Athol Kay And Jonathan Dalton Step In To Lighten Us All Up A Bit

September 29th, 2007 · 3 Comments

The re.net’s very own sock puppet steps in with his own inimitable brand of humo(u)r* and tells us what would have happened had Move.com had consummated the purchase of Active Rain.

Jonathan Dalton, meanwhile, is looking for a buyer for his blog.  Rumo(u)r* has it he may thrown in some Captain Morgan as well.

* Extra (u)’s included for the benefit of Athol Kay, Joel Burslem, and the other remnants of the ex-British Empire amongst us.

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Tags: Active Rain · Move.com

Reaping The Fruits Of Others’ Labor? Or Adding Value To It?

September 28th, 2007 · 13 Comments

For those who care about such things, the big recent news is, of course, the Move.com vs. Active Rain dustup.  While much of the commentary amongst Active Rainers has been supportive of their fearless leaders, there is also an underlying angst about the notion that while the content of Active Rain is provided by its 50,000-odd members, the windfall from the prospective sale would have accrued not to those members, but to the owners of Active Rain.  Were Messrs. Mardini, Heaton, and Washburn indeed going to enrich themselves with the fruits of others’ labor?

The question really boils down to this:  wherein lies the value of a community network such as Active Rain?  I say the value is twofold:

  1. The community itself
  2. The ecosystem that provides value to that community

Without the hard work of the community, Active Rain would be just an empty shell.  Conversely, without the ecosystem that the Active Rain platform provides, many of the 50,000 participants’ blogs would be a fraction of what they are now.

So is it fair for the owners of an ecosystem to profit from the contributions of the members?  Fair or not, that’s the way our capitalist system works:  unless Active Rain was structured as an online collective, it is unlikely that the members would have seen a personal windfall.

Think of two other similar ecosystems:  Ebay and Craigslist.

At Ebay the sellers do all the work of getting a product ready, advertising it on the site,  shipping it to the winning bidder, and rating the buyer.  The buyers do all the work of bidding, submitting their credit card information, and rating the seller.  Ebay simply provides the ecosystem that makes all this possible, and intervenes to deal with disputes and fraud.  Buyers and sellers do all the work, and the only benefit they get is the ability to buy and sell stuff — a great benefit, to be sure, but nowhere near the benefit that Ebay gets of being a multi-billion dollar company.

Craigslist provides not only a platform for buying and selling goods and services, but also for matching employers and employees, renters and landlords.  Again, the community does all the work.  The founder and majority owner of Craigslist, Craig Newmark, could be a multi-gazillionaire many times over, but has chosen to settle for merely millionaire status.  Again, its the owner to whom the economic profits accrue.

We can argue all day — and we have been — about whether Active Rain is worth $30M or not.  What we cannot argue with is the notion that, whatever its monetary value, it rightfully accrues to its owners, not its contributors.

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Tags: Active Rain · Craig Newmark · Craigslist · Ebay · Industry · Move.com · NAR

Mr. Arrington, Please Stick To Your Knitting

September 28th, 2007 · 3 Comments

michael_arrington.jpgMichael Arrington, founder and editor of tech blog TechCrunch, piles in on the Move.com vs. Active Rain dustup in a highly entertaining post entitled Highly Entertaining:  Realtors Suing Realtors.

His summary of the controversy is well done.

His grasp of the real estate industry, however, is not, as evidenced by the post title itself.

Active Rain is not a Realtor, or Realtors.  It is an Internet startup.  Its product is a blogging ecosystem for real estate professionals.

Move.com is not a Realtor, or Realtors.  It is an established Internet company, affiliated with NAR, which itself is also not a Realtor, or Realtors, but an association of Realtors.  Move.com’s products, until recently, specifically did not include a blogging platform.

Fairly predictably, Mr. Arrington could not resist the opportunity to take yet another swipe at the real estate industry, though it is hard to argue with one of his statements:

…a lot of people have had negative experiences with realtors and wish there was [sic] a better way to buy and sell houses.  And whenever we write about how screwed up that industry is, the realtors come out and start trolling in the comments.

Ok, I admit, I was one of those trollers.

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Tags: Active Rain · Industry · Michael Arrington · Move.com

Today’s Real Estate Gossip: Move.com Does A Microsoft; Foxtons Does A Countrywide

September 27th, 2007 · 27 Comments

Exciting times indeed in real estate! Market woes, mortgage troubles, bankruptcies, lay-offs…

Foxtons, a discount real estate brokerage, lays off works

Adding to the bad news is that Foxtons, the UK-based discount real estate brokerage, is laying off 350 employees from its New York and New Jersey operations. Some have predicted that this down market will weed out the non-traditional players [see comments section], Redfin being the company most commonly named. Michael Wurzer, meanwhile, says his long-time prediction of declining agent numbers may finally be coming true.


Inman reports that Move.com, the 800-pound gorilla of the business, is being sued by Active Rain, the utterly addictive 50,000-strong online real estate community. It has been an open secret in the real estate world that Move.com was positively salivating over Active Rain’s strong viral network of real estate professionals, and that negotiations had broken off. Now the full story has come out. Active Rain’s side of the story is, essentially, that Move.com took a page out of Microsoft’s playbook of the 1990’s, before they got smacked down by some unfavorable court rulings: court a smaller company, find out everything you can about its business model, technology, and market…then break off the talks at the end and do it yourself. Move.com, meanwhile, says that nothing Active Rain showed them during negotiations was even remotely earth-shattering.

ActiveRain’s official statement to the ActiveRain community: (login required)

Members of the ActiveRain Real Estate Community,

Recently Inman News reported on a lawsuit brought by ActiveRain against Move, Inc. Of course reports of this nature raise a lot of questions, and it has always been a part of our culture to openly discuss things with our community. We would like to be able to discuss these issues more with you. However, since this is a matter of pending litigation, our counsel advises us not to comment.

Should you be interested in the positions of ActiveRain and Move, Inc. in this lawsuit, attached are ActiveRain’s Complaint and Move, Inc.’s Answer filed with the Court in this proceeding.

We thank you for your continued support and understanding.

ActiveRain members, by and large, appear to be supportive of the company, suspicious of Move.com’s intentions, but perhaps a bit concerned that ActiveRain would have considered consorting with Move.com in the first place. The delightful and ever-opinionated Laurie Manny says: [boldface mine]

Imitation is the most sincere form of flattery.

How did Realtor.com/Move.com expect to become successful without us, the membership? Realtor.com has been repelling Realtors with their high prices and lack of performance for well over a year now. Free blogs - for how long? They do not rank up on the engines now on their own, they need AR to do that. What are they offering the membership that we do not already have? Ok, so maybe in about 6 months we would all acheive similar rankings to what we already have?

I think you guys at AR are fantastic, but I have to ask. Why the hell did you jump into bed with such losers to start with? If they were going to pay it somebody else would have as well.

Live and learn.

ActiveRain complaint

Move.com response

Other commentary on the same story:

Pictures courtesy of thisfabtrek.com, foxtons.com, gorillahub.com, move.com, and activerain.com

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Tags: Active Rain · Countrywide · Foxtons · Industry · Move.com · Redfin