Whether you're a home buyer, seller, or real estate agent working to seal the deal, it goes without saying how important it is to work with the most up-to-date Multiple Listing Services, or MLS, data possible. But with hundreds of MLS maintained individually across the country, to bring them all together under one cohesive platform is an extraordinary challenge.
Luckily for investors, that is a challenge Zillow Group (NASDAQ:ZG) just proved it has no problem tackling. A few days ago, Zillow announced that 25 new MLS joined the Zillow Partnership Platform in February alone -- almost one per day -- bringing thousands of new direct listings to the site.
If one door closes . . .
So why is this a big deal?
First, keep in mind that in January, many investors were concerned when Zillow announced that after April 7th, the company will let its long-standing agreement to receive MLS listings from ListHub expire.
After all, when the deal was announced nearly four years ago, ListHub pointed out that it would send roughly 2 million direct listings from 358 MLS to Zillow every day. As of this writing, ListHub shows over 500 supported MLS in its network.
Make your own door
Of course, Zillow has since launched its own listing management and reporting platform called Zillow Data Dashboard, which started with direct connections to a whopping 1.6 million for-sale-by-agent listings. But even so, many investors could not help but wonder how much more work it would be for Zillow to completely make up for the "loss" of its ListHub agreement.
However, we also need to keep in mind that ListHub is owned by Zillow competitor and realtor.com owner, Move, which itself was acquired by News Corp. (NASDAQ:NWS) last September. Perhaps unsurprisingly, this dynamic played a large part in Zillow's decision to let the deal expire.
During the conference call last month, Zillow CEO Spencer Rascoff offered valuable insight on how freedom from ListHub is actually of great benefit to the company:
When we announced that we were parting ways with News Corp a couple months ago, we were really freed from the constraint of being reliant on a competitor for listings -- a competitor whose incentive was obviously to continue to send Zillow inferior listings in order to advertise that their own website had higher quality listings. So that was a liberating moment. [...] Two of the three largest MLS in the country have already decided to send Zillow listings feeds. We have dozens more in the deal pipeline that will be announced over the next couple months.
When News Corp initially acquired Move, it boasted that realtor.com had "the most up-to-date and accurate for-sale listings of any online real estate company in America."
Now that Zillow Group is aggressively working to secure its own hoard of direct MLS partners, it may not be long before that claim is inaccurate.
If anything, the latest 25 MLS to join hands with Zillow represent at least partial fulfillment of Rascoff's promise of additional deals in the pipeline. Later during the call, he also revealed that recent Zillow acquiree, Trulia, has worked independently for about a year longer than Zillow toward this aim. As for the acquisition, Trulia was already enjoying great momentum and counted around 125 listings feeds direct from MLS, which obviously bodes well for Zillow's own efforts.
Rascoff also noted that over the past few months, it has become widely accepted that if you send a listing directly to News Corp. subsidiaries, you also send it to the Zillow platform, which feeds a much larger audience as it collectively powers Zillow, Trulia, and HotPads. As the industry accepts this as the norm, we should continue to see a steady stream of new MLS partnering directly with Zillow going forward. Consequently, that should mean that the quality and timeliness of its MLS listings -- and in turn, the size of its audience -- should only continue to improve.