New HOMS biz model for MSN traffic

Late last week Inman News published a guest perspective that raised some issues relating to Homestore’s recently announced agreement with MSN. I would like to respond to these concerns and clarify some details that seem to have been misunderstood.

First of all, Homestore is not giving data currently displayed on Realtor.com to anyone. As with all of our distribution relationships, including those with AOL, Earthlink, NetZero, Juno, Excite, etc., data will continue to reside on Realtor.com’s servers. Consumers who visit MSN House & Home will have the opportunity to freely access this data through a series of links that will take them to the Realtor.com Web site.

When these links go live later this quarter, we will be exposing all listing data to a much larger audience–for no additional charge to our customers. Realtors who have chosen to enhance their listings on Realtor.com will have access to this important audience–for no additional charge. We have developed and will continue to develop agreements of this nature to give Realtors and their listings as much consumer exposure as possible.

This kind of exposure does cost money, though. With this agreement, we have developed a model to pay for the additional traffic that will be driven to Realtor.com by MSN. We will be creating additional Featured Home, Featured Agent and Featured Company positions on Realtor.com that will be visible only to MSN users. Realtors will have the opportunity to secure these additional advertising positions. It is only revenue from these incremental product sales that will be shared with MSN.

Of great significance, as part of the agreement between Homestore and MSN, LendingTree will no longer be able to advertise its realty services within the House & Home channel. And we will maintain our policy, which precludes any LendingTree advertising anywhere on Realtor.com. This means no consumer can “leap off” to a LendingTree ad while looking at Realtor information.

By securing this channel, we are ensuring that millions of additional consumers will have full access to a Realtor-friendly site. They will not be exposed to for-sale-by-owners or services that promote tariffs and referral fees.

We agree with Inman News‘s guest writer’s view that LendingTree is executing a business plan that has been well thought out. This plan has the power to make access to online consumers prohibitively expensive, while demeaning the expertise Realtors add to real estate transactions. Make no mistake, any time we have the opportunity to create a consumer experience that favors the real estate industry (and says “no” to referral fees), we will attempt to do so.

Allan Dalton is president of Realtor.com.