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The big shakeup at HouseValues got a lot of people talking this week. Questions about the long term survivability of the company echoed through the blogosphere, much of it spurred on by the grumbling of ex-employees.

As one of the highest profile real estate 1.0 web properties, I believe HouseValues’ troubles are ultimately a result of the macro changes that are happening right across this industry. It’s pretty clear. Real estate professionals are no longer the gatekeepers of information.

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On the surface however, HouseValues has not evolved. It’s main sites JustListed.com and HouseValues.com still treat consumers like children and are obviously little more than lead capture tools. Homepages.com is so confusing and poorly designed, it borders on being virtually unusable.

In the past, there may have been few other options to turn to; but consumers these days have many more friendly data sources to choose from – Trulia or Zillow, Redfin or Shackprices, just to name a few. HouseValues, who built their business selling leads on to agents, is under the very real threat of losing that business once consumers wise up.

morris3pc3.jpgI was curious on how they plan on turning things around and Ian Morris, President and CEO of HouseValues was nice enough to allow me a few minutes of his time this week to talk to him about how they plan on righting the ship and charting a new course.

First off, Morris insisted (somewhat tenuously in my mind) that they weren’t competing with any of these new players – rather that they were in the business of connecting consumers and real estate agents.

At the heart of that connection, according to Morris, is their Customer Relationship Management (CRM) platform which allows the agents to manage any leads they receive and develop a business relationship with that individual.

Morris indicated that the direction for the company going forward is that they would be refocusing on the sales and support of this platform.

So does that mean they are moving their business model from lead farm to more of a Salesforce.com-type business model?

I suspect it might. It may be the only hope they have left.

What was clear to me however, was that Morris understood the changes in the consumer behavior that are forcing them to make some changes. “There’s no such thing as an Internet lead,” he told me. Quite a claim for someone that once was in the business of selling Internet leads.

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