Listhub recently released a term sheet that it was using in its negotiation with Zillow (https://www.listhub.com/zillow-agreement-proposed-terms/), declaring that it “believe[s] that this set of terms represents a fair exchange of value between the content owner and the publisher, and is designed to benefit both parties mutually.” Now, we still can only guess whether the reason for the two companies not coming to terms had to do with anything on the term sheet, but there were at least two items that, if we had been in Zillow’s metaphorical shoes, would have been deal killers.
First, it is one thing to provide detailed traffic metrics to MLSs and brokers, but it seems quite unacceptable to provide it to a company owned by a direct competitor (MOVE / Realtor.com). Second, this term could be a deal-killer, too: “Zillow will not offer any advantage (display, cost, or otherwise) to any party as a result of offering a feed directly to Zillow instead of ListHub.” The idea that Listhub would get to restrict what benefits Zillow could offer someone who isn’t a Listhub customer seems unrealistic. Moreover, the second term ensures that Zillow cannot easily develop its own direct feeds and that their competitor controls the terms of the relationship with the data providers on which Zillow depends. That seems untenable. Both of the terms described do not just benefit MLSs and brokers; they also benefit Zillow’s competitor, Realtor.com.
So, thanks to Listhub for providing the term sheet and helping provide this insight – though usually a company doesn’t disclose the private terms of negotiation.
Lots of people in the industry have been wondering, “Who broke up with whom?” in the story of Zillow and Listhub. It doesn’t matter. The relationship is over, and within a few months, most, if not all MLSs and many brokers will probably establish direct distribution deals with Zillow, and probably other leading publishers as well. Please don’t ask us to take sides in this breakup – we just have to help our clients in the aftermath.
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