On Zillow

Zillow announced a couple of very interesting new features this week that have drawn a lot of attention: the ability to “claim” your home and add user-generated content to it, and a feature called “make me move” that allows homeowners to put an “offer I can’t refuse” price on their home without actually putting it on the market. (One could reasonably argue that the action of publicly pricing one’s home, even irrationally, constitutes putting it on the market, but I daresay the oligopolistic realtors of the world would disagree. . . .)

Josh Kopelman has a post questioning whether Zillow, having raised $50+ million for a consumer play without a visible revenue stream other than advertising, is going to go “that big”, or is simply a rehash of an operatic tragedy we’ve seen before.

As I’ve written elsewhere (see comments), I can’t wait for the real estate market to tip, as though there is significant inertia in the current market structure, there is also significant inefficiency and frustration on the part of consumers. If marketplaces are simply places where buyers and sellers meet by arbitrary convention, I would argue that we are but one such convention away from eliminating realtors completely (much as craigslist has nearly wiped out local classifieds) — or at least from taking away a significant amount of their commission pricing power.

As Josh knows, arbitrary conventions can be created with new levels of efficiency by the internet — and the founder of Zillow has done this before. While I don’t see these new tools as a direct play to dis-intermediate realtors — yet — I do see it as a reasonable attempt to become the defacto spot for consumer-oriented real estate content and to build a lot of proprietary data and user lock-in. Kind of like a craiglist with better authentication tools and structured, incentivized UGC — and completely unlike previous attempts to create a virtual real estate market.

And if this is successful in garnering a critical mass of consumer participation, then it’s an easy step to turn it into the virtual trading post of choice, and even the “real real estate OS”, if you will, potentially enabling all kinds of things ranging from obvious mashups to a real-world Second Life universe.

This is a very big bet — with a very big prize if it pays off. Good luck guys - I look forward to a day when I can I don’t need to pay over $30,000 for someone to type my address into an MLS system, give me self-interested negotiating advice, and fill in the blanks of preformatted contracts for me.