Maybe We Do Understand Zillow After All

Its been amusing watching Greg Swann for whom I have a great amount of respect twist himself into knots trying to convince us that we just don’t understand zillow’s latest release.  I read a seemingly unending slew of articles designed to convince everyone that Zillow 5 almost requires that you’d best get on board now in order to be successful. The Zillow marketing team couldn’t do a better job convincing the good folks over at the bloodhound..that’s what marketeers get paid to do and they’ve done it well.

Kissing Cousins: Zillow 5  & Wikipedia

I dont share Greg’s willingness to go to the mat so quickly about the new Zillow features (perhaps I just dont have the same incentives).  I do share one key area of agreement with Greg, however – the comparison of Zillow 5 to Wikipedia. It’s likely the closest conceptual match to what zillow has proposed with their latest release:  a site where users are enabled to edit an almost unrestricted variety of content for which the user feels knowledgeable that ultimately ranks well in search engines.

Are Communities Different Than Groups?

Web 2.0 as defined by Greg:

“Web 2.0 creates an ongoing community of active users by integrating a user-modifiable database through an interactive, as opposed to static, web-based interface.

Let’s start by thinking about the community that surrounds Web 2.0 sites. We’ll stick with four conceptual logical groupings for all of the sites :

1) Active updaters that make lots of changes
2) Active users that make less frequent updates
3) Active users that make no updates
4) Infrequent users

These are all users – but maybe my idea of community is somewhat different than Greg’s.  If there is any definable community for Wikipedia, it would be largely within the #1 group of 5000 or so editors that diligently provide the vast majority of edits (according to wikipedia’s data, 2500 people make about half of the total edits). An exponentially smaller percentage of participants in said community might come from group #2 or #3. I think that you’d find the same groupings and likely same broad brush percentages of those that feel some sense of community at other popular social web 2.0 sites. I’d argue that no such tangible community exists within groups #3 and #4  (anymore than there is a  “community” of people with, say,  driver’s licenses.)

Most Want Answers From Wikipedia Not Community

Never mind all of the active interface stuff, the vast majority of users never interact with the interface to know the difference between active and static interfaces.  They searched for something, found the [insert name of site here] website and now just want an answer/some information. Despite Greg’s arguments to the contrary, wikipedia *is* simply a collection of encyclopedia articles from a public standpoint. In many cases, thats exactly what they want it to be – semantic enough to get the darn answer or information that I want 😛 Anecdotally I’m sure that some group of users is like me in that they do a search elsewhere, click over to the wikipedia link prominantly displayed in the search results, and then back to Google.  It’s simply one of N resources that exist in the internet.

Page Views Do Not A Community Make

But powerful resources with true communities often are near impossible to replace. Greg rightly points out that the difficulty of unseating any of the major web 2.0 players in the marketplace has little to do with the technology.  Most of these technologies are rather simple…and he uses eBay and wikipedia as his prime examples.

Herein lie the issues for me. Ebay and Wikipedia simply don’t share the same types of dependencies on their user base for their sites’ success. People often spend time on eBay (or Digg) poking around for things that are not in any way associated with their original intent. Sites like these have a dedicated user base that often returns to the site to consume new content. Wikipedia on the other hand has a dedicated content generation base. When was the last time you “just went to wikipedia to spend some time” like…umm…never? I can only speak for my own experience but I feel no sense of community at all on wikipedia as a user.  People generally dont blog about wikipedia…they view it as a resource. 

Zillow 5, like wikipedia, is being built on user supplied information. Therefore, Zillow 5 features by definition need to be conceptually much closer to Wikipedia’s model than eBay’s.  Given the differences, I’ll extend Greg’s observations therefore and say that in the case of Wikipedia and unlike eBay, unseating its market position has very little to do with community that has establised itself on the site. Wikipedia’s barrier to entry seems to be more in replacing the sizable body of information that they have established to date rather than having to convince some set of users to move from one site to another (see Greg…we do understand what Zillow wants to do).

There is definitely some critical mass of that assembled information that once passed becomes a barrier to entry for others. Zillow is working to get there. But, despite this critical mass already being achieved by Wikipedia, the death knell has simply not been dealt to other information brokers – simply put, wikipedia has become another resource used while searching. 

Will It Be Users That Form The Real Community Around Zillow 5?

 Zillow will be successful in building a community.  Blogging A-listers like Greg will blog about it, comment about, and be quoted in newspapers and thats all good. But I dont believe that the zillow 5 features will do enough to break the model established by its content-rich kissing cousin.  I foresee a similar trajectory there will likely develop a community of very active real estate service providers that mainly ne representative of group #1 above. They’ll be the ones like Greg adding their hundreds and thousands of photos. The “draw” or reason to be on the site in their case is the opportunity to sit in the driver’s seat until the owner of a property comes by and also by the advertising opportunities. Viewing the competition of other service providers within given zip codes also could be a sufficient draw. 

There will also be some set of people looking to buy or sell properties.  We know that most studies suggest that buyers will likely use search engines to find real estate. Zillow content will be found and viewed much like wikipedia content is today.  Only time will tell how often will buyers specifically go to Zillow to see if their dream house is for sale or if new information is available if they are not in the market remains to be seen.  Will it be more often than they go to a domain name sales site to see if their dream URL is available?  If so, how often is that? 

The most controversial draw is homeowners somehow believing that they’ll have to claim their property at the Zillow site to avoid having someone else provide information about the property. Though it makes for great marketing chum, it seems to necessitate about the same level of urgency as the need to check wikipedia (or any of the major search engines, for that matter) to see if anyone is posting your personal information.  Joe and Jane Consumer aren’t doing that on any sort of regular basis now. Why, then,  would Zillow be any different in terms of this particular “draw”? More importantly, why would the legal process and subsequent remedy for posting untrue or derogatory information on Zillow be any different than for any other website? In short, if the information is correct, folks will likely leave it…if not, they’ll seek whatever remedies required to have it removed.  The Zillow guys are smart guys..my guess is that they’ll announce some update to this feature to “better support the user base” after wringing out all of the marketing value….ths particular feature is kind of like the Jerry Springer show encapsulated in programming code.

Role of The Service Providers:  Provide Activity And Page Views

Much like wikipedia, the largest community will grow around the active service providers.  There is an issue here as well. For the community within eBay and wikipedia any industry disintermediation is viewed as a  benefit to the entire user base. Ironically, Zillow will be relying on many of the very people that it seeks to disintermediate in order to build its base of active content providers.  Granted that Drew and company are working hard to be REALTOR-friendly in the blogosphere, but disruption is clearly in Zillow’s business model and their key marketing differentiator. Note: no value judgement here, just my own observations. 

This is where the pay-per-impression model is, in my view, a long term master stroke by Zillow. Using wikipedia (or even Digg) as an example, we know that popular user generated content sites have an active core group of content providers that generate a large number of page views. So, it’s equally likely on the Zillow site, that an active core group of real estate service providers will generate a high percentage of page views as well..particularly zip codes that have a high service provider participation rate.  The difference being that the page views at zillow are subsidized…well…mostly by other service providers.  The Zillow revenue model assures that they dont even need to worry about the fact that service providers have a low probability of clicking on other service provider ads.   This will be particularly interesting when the most active service provider zip codes have rates that increase with limited supply of EZ Ads.  Those are the future blog posts that I want read when this all plays out…when the 1 penny crack hits go away….and it’s time to pay the dealer.

Oh…a quick inclusion of the Zillow api into the discussion…looking down the road, what would be the reaction if, at some point, other people’s EZ Ads were rolled into the API output?  Likelihood?

Where Are We Now?

– Zillow isn’t in the market position of an Ebay or a wikipedia right now and, in my opinion, it’s bit premature to decide that they are based on this specific feature set. Perhaps in the future they may be, but we also have real life examples of companies that thrive in such environments.  History is against Zillow establishing such a dominant position but their disruption marketing is a strong aid in the attention economy.

– Just because online content generators have some sense of community doesnt mean that general public that consumes content will feel as though they participate in communities. Wikipedia has shown us that just because we can edit content does not corollate to large numbers of regular users actually doing so.  The likeliest community will be formed by service providers who ironically have the most seemingly to lose by making the site successful.

– In terms of personal content being generated by others, we have a model in Wikipedia to anticipate what will happen with Zillow’s new features.  My thinking is that Zillow’s content will be found and consumed much like wikipedia’s is today by the general public but to a much smaller audience.  Process and legal remedies will continue exist for false, derogatory, or other such information.

In all, I’m fairly neutral…honestly, a bit underwhelmed by the uptake.  I’m certainly not ready to gamble my credibility on pumping services that haven’t proven to be the inflection point of real estate as we know it.  Zillow may well be on the road to such an end state…but there is still a long journey.

Disclosure: This is likely unnecessary but in terms of full disclosure, a representative of Zillow did contact me about employment as a senior software manager just as they were getting off the ground in Seattle a little over a year ago.  We exchanged several emails with interest from both sides but ultimately I was thought it best to go off and do my own thing.  Our commercial web engine gets 1/10 of their traffic, I dont believe that I personally know any of the team, and Zillow does not operate in our geographic focus areas.