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Zillow Acquires Diverse Solutions – What Does This Mean for Everyone?

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Wow, the Zillow acquisition of Diverse Solutions for $7.8 million in cash and stock is big big news for this industry. I’ve got a unique perspective on this announcement for a few reasons:

  1. At Virtual Results, we work extremely closely with Diverse Solutions. Their dsIDXpress comes standard with every Predesigned Website that Works (dsSearchAgent is optional), and on most of our customs.
  2. I worked for Zillow for almost 5 years & worked with Diverse Solutions as an API partner starting back in 2007 (& 2008).
  3. I happen to be close friends with a few people at Diverse Solutions

It goes without saying that I want to congratulate all those involved. I have many friends at both organizations, so I’m obviously happy to see them join forces. But, what does it mean for everyone involved you are likely wondering?

Zillow

First, this gives Zillow relationships with the roughly 200 MLS’ that Diverse Solutions currently works with. It’s a much easier process to work with one data provider like Diverse Solutions than working with 200 different MLS’ individually. We all know listings quality continues to be a pain in the rear for all real estate portals — one interesting product that will certainly come as a result of this acquisition is a seamless listing syndication program for all Diverse Solutions clients that’s hooked straight to MLS data.

Second, there is certainly revenue growth here for Zillow — the deal gives Zillow the ability to sell Diverse Solutions products to their sizable advertiser base, as both a package deal with Zillow Premiere Agent subscriptions as well as a standalone IDX product.

Third, Zillow gets one step closer to being able to offer agents and brokers everything they need to power their respective online marketing efforts.

Diverse Solutions

There is certainly no question this is a massive win for the team at Diverse Solutions. Being backed by the largest real estate site on the web gives them increased engineering resources, sales and marketing, and just general long term strategic security that they didn’t have before.

Diverse Solutions Clients

I expect Diverse Solutions to get a significant bump in terms of development resources, which should mean better products for clients of Diverse. The holy grail of listing management is for an agent/broker to maintain their listings in one place, and have that seamlessly feed into their entire online marketing; this takes Diverse Solutions clients’ one step closer to that (once a seamless syndication product is integrated).

MLS

The MLS data agreements that Diverse currently has in place will all be honored, so I really don’t think this should be much of an issue for MLS’.

Rob picked up on the hostile interpretation of the acquisition — which is the possibility of a “ZDX” that COULD come at some point down the line. “ZDX” (or whatever you want to call it) would be an IDX experience for agent and broker websites powered by Zillow listings rather than IDX data. So, I guess MLS’ might have something to worry about after all. But, this certainly won’t happen for awhile — if at all.

Now, Zillow just needs an integrated website product and a CRM to be able to give agents and brokers a one stop shop of products to power their entire internet marketing efforts 🙂

What do you think of this acquisition?

About Drew Meyers

Founder of Geek Estate Blog / Geek Estate Labs. Zillow Alum. Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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  • These are complementary products and so at its most basic the acquisition represents a good way to get agents who use one to try the other, too.  But of course the possibilities that don’t exist yet that arise from the combination may be even more exciting.

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  • Congratulations to Diverse Solutions and Zillow…I’m sure it will allow Diverse Solutions to create more great products for real estate agents to use….I’m not sure there will be a “ZDX”…

  • Zillow merging Diverse Solutions into their plan sounds like a winning situation for everyone! 

  • For me as an existing DS customer, this is not good news at all.
    I wrote about is on my blog
    http://www.naples-fl-real-estate.com/2011/zillow-diverse-solutions/

    • I couldn’t agree with you more.  I’m currently using Diverse Solutions for my blog and am concerned this is giving one of my biggest “search rankings” competitors a bigger advantage.  

  • Well, glad to hear about Zillow.. 
    I appreciate for sharing the information.. Great!

  • As a DS customer, I could care less who owns the company.  I just want a smooth, cutting edge idx platform that is easy to integrate into my personal site: http://www.bradofficer.com .  If the big Z can keep DS ahead of the curve, I’m a happy customer!

  • Jim Stevenson

    I can’t wait for boards or real estate to wake up and quit giving the data away for free.  It belongs to the brokers.  Once either the brokers collaborate and stop the feeds or the boards wake up take ownership of this mess, then syndicators will be out of business.  It’s not going to be easy, but legally, boards own nothing.  The listing belongs to the broker and they need to start selling the data.  Then we’ll see if the syndicator model can survive.

    • Allensellshouses

      Thanks for your comment on Zillow buying out DS. Guess some people still think big businesses are here to be your friend and to play by the rules.

  • I think Graham’s comment below might give a bit more insight into the industry’s view.  It’s not as cut-and-dry as marketers might believe.

    Zillow has the best national platform and tools online for marketing brokers’ listings in one location.  It’s a traffic magnet, and because Realtor.com won’t/can’t duplicate it, Zillow will continue to rake in the advertising dollars.

    What will be interesting is Zillow’s increased focused on revenue from real estate agents.  “Premiere” agents are already paying to sponsor zip codes, and more will potentially buy idx services through Zillow. 

    The competitive issues are clear.  If you don’t currently have a platform to market online, then you’re no worse off starting out by paying for Z/DS services.  If your current web site is already competing online against a Zillow/Trulia/etc for traffic, it might leave a bitter taste to be paying them for services and increasing their ability to minimize the traffic to your personal site.

    The players and the angles are getting murkier.

  • Congrats to both Diverse Solutions and Zillow — we look forward to creative and cutting edge solutions on the horizon.  Side note:  How will this affect all our work on the back end of Diverse?

    • Just to clarify, it won’t affect the back-end (or product) in any way. That said, link-structures and settings in Control Panel will all remain the same. We’ll of course continue to work on product enhancements like we have been with dsSearchAgent v3.0+ and those updates will go out like they have been. 


      Ricardo Bueno
      Diverse Solutions

  • Allensellshouses

    I have to agree with Jim Stevenson
    comment. Zillow buying out DS will give them more online power than ever. Even
    with Zilllow’s lack of correct information they are still our online
    competition. I know for a fact if Zillow does buy out DS myself and many of the
    agents in my office, myself included will be finding a new IDX system.

  • “If your current web site is already competing online against a Zillow/Trulia/etc for traffic, it might leave a bitter taste to be paying them for services and increasing their ability to minimize the traffic to your personal site.”

    Agreed. I have had a great experience with Diverse Solutions products, and have built my site around a deep integration of their products. Zillow owning the company that that integration is based on does not give me warm fuzzies.

  • Erika Eaton

    This is bad news. Diverse Solutions focus will now shift from assisting local, entrepreneurial agents enhance their web presence to aiding a national company’s efforts to dominate the Internet and serve as a clearinghouse for real estate leads. I don’t see how you can serve both interests. It will be the national company’s efforts to conform everything on a national level and commoditize individual agents into highest bidder status versus the local agents trying to market and think locally.

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  • I highly doubt Zillow will ever replace MLS, but it sounds like Diverse Solutions is going to become a major MAJOR player in the IDX game. I use IDX Broker for many different reasons… tried Diverse Solutions and there where a few things that it couldn’t do that i needed it to.

    • what specifically couldn’t it do?

    • Mike

      Heaven forbid. The information is already inaccurate enough. If it replaces the MLS the public is screwed.

  • Anonymous visitor

    I’m a user of all the diverse products. One thing I find odd is the low value of the sale to be honest, all those data agreements, not to mention a decent collection of customers to boot. So why so low, are there issues? Historically diverse (apt name) has bounced all over the place in product offerings, and their current products sometimes feel conflicting, certainly “diverse”. $8m is very cheap…. What most interests me is why.

  • Loved this post. You made certain good points there. loved it.
    Great work, keep it up!

  • Mike

    Bad news. A competitor with brutal information at all levels (Zillow) has bought up my IDX provider. I guess I can expect worse service from Diverse Solutions. DS already has enough of its own issues. If it ends up with “zestimate” quality. I will be leaving DS for sure.

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