Realtor.com and MSN yesterday announced an exclusive content provider and revenue-sharing agreement that will create a co-branded MSN version of Realtor.com’s Web site. The co-branded Web site connects MSN’s House and Home section to Realtor.com’s listings data, display advertising and other information.

The deal is startling because the powerful MSN portal is owned and operated by Microsoft Corp., the fearsome “lion coming over the hill” that was supposed to devour the real estate business while Realtors squabbled over a bone. The software giant’s original HomeAdvisor Web site was a standalone head-to-head competitor with Realtor.com, which Homestore operates as the official for-sale homes Web site of the National Association of Realtors. HomeAdvisor was merged into the MSN portal in October 2002.

“It’s been a longstanding cat-and-mouse game that we’ve played with Microsoft and that has played out in front of the industry. MSN has learned a lot about the industry and the real estate space, as we have, and they have concluded that distributing these listings on behalf of the NAR members is a powerful business proposition and a good consumer experience, and that is something they want. It needed to have economic opportunities for them,” said Allan Merrill, EVP of corporate development at Realtor.com.

Realtor.com and MSN will share incremental revenue from sales of display advertising on the co-branded Web site. That means brokers and salespeople who want to capture the MSN traffic will have to pay a separate fee to advertise on the MSN version of Realtor.com even if they already advertise on Realtor.com

“It allows the agent to reach an additional audience,” Merrill said.

Pricing for the new inventory of display ads hasn’t been finalized yet, according to a Realtor.com spokesperson.

Neither Homestore nor MSN has disclosed the financial details of its deals, which also include new homes and apartments information. Historical documents suggest Homestore, a publicly owned corporation, would disclose any material payments that would impact its financial results. Payments probably are part of the deal, but they likely don’t amount to the astronomical sums that Homestore once agreed to pay AOL.

The latest deal is exclusive with respect to listings data. That means no other listings information can appear on MSN House & Home or elsewhere on the MSN portal, according to Merrill.

The agreement prevents MSN from putting certain types of advertising on its House & Home channel. Specifically, companies that aggregate and display listings online or collect referral fees for leads to real estate brokers and salespeople will be banned from MSN House & Home. The co-branded Web site will be bound to the same NAR rules that already restrict such advertising on Realtor.com.

“There are some restrictions that won’t stop Realtors from advertising, but they will preclude other aggregators and referral fee players from advertising alongside this listing content,” Merrill stated.

The deal is likely to disappoint MLS executives who once received substantial payments from Realtor.com and HomeAdvisor for the use of listings data. Realtor.com now offers MLSs a limited revenue-sharing opportunity. The deal announced yesterday doesn’t include any payments to MLSs.

MSN last year announced it would stop paying MLSs altogether for listings data. The Microsoft portal then signed a deal with then Primedia-owned RealEstate.com. That arrangement proved faulty became RealEstate.com didn’t have the right to distribute for-sale homes information from The Real Estate Book that it had promised to deliver to MSN. The Real Estate Book sued RealEstate.com, which agreed in a settlement to cease its unauthorized distribution of the data.

Magazine giant Primedia then sold RealEstate.com to LendingTree, which was among the companies MSN vetted in its search for a data provider to replace its terminated MLS data contracts. LendingTree is the Interactive Corp. subsidiary that operates an online lender marketplace and find-a-Realtor service.

“We’ve chosen Homestore as our real estate partner because of the depth and breadth of content and services they provide in this space. Homestore is the clear leader in the listings category with over 2 million homes for sale,” MSN Product Manager Brooke Richardson wrote in an e-mail message to Inman News.

Sources disagree about the fate of the contract between RealEstate.com and MSN. A spokesperson for Primedia said the contract had been sold to LendingTree along with the other RealEstate.com assets. That story is supported by the fact that the RealEstate.com search function still exists on MSN House & Home with a notice that it is powered by “RealEstate.com, a service of LendingTree.”

But LendingTree spokesperson Mindy Neubauer said LendingTree didn’t purchase the contract and that it expired on the same day LendingTree’s purchase of RealEstate.com closed. It’s possible that neither Primedia nor LendingTree wants responsibility for the problematic agreement.

Richardson declined to comment on which corporation now owns the RealEstate.com contract, but said MSN is “confident” that its listings content will be provide by “a combination of LendingTree and RealEstate.com’s listings” until the co-branded Realtor.com Web site is ready this Spring. After that, Richardson said, the contract will come to an end.

“We came to realize that our business models and the future direction…were no longer in synch, and (we) mutually agreed to discontinue the relationship,” Richardson wrote in an e-mail message to Inman News.

Realtor.com’s status as MSN’s exclusive listing provider seemingly would preclude continued use of RealEstate.com’s data and search function. Neubauer declined to state whether the RealEstate.com-powered search will be removed from MSN House and Home.

LendingTree’s lender marketplace will continue to be featured on House and Home and LendingTree’s find-a-Realtor service will be “all over” MSN with the exception of the House and Home section, Neubauer said.

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