Breaking News in the Zillow v. Move Inc. Saga: Major Legal Setback for Samuelson, Zillow

Recall that in March, we told you that the biggest battle brewing in the U.S. right now is between Realtor.com, owned by the National Association of Realtors, its digital company Move.com, which operates Realtor.com’s websites and social media, and Zillow, the huge and ever-growing third party real estate beast portal that agents both love and hate.

Recall all those defections to Zillow? Well,  yesterday, Washington State Superior Court Judge Barbara Linde issued a preliminary injunction in the case of Move, Inc. and the National Association of REALTORS et al. vs. Zillow, Inc. and Errol Samuelson et al.

Samuelson resigned March 5, 2014 as Move’s Chief Strategy Officer and that same day joined Zillow as the company’s second-highest paid executive. The ruling, posted by the courts today, finds that Samuelson misappropriated trade secret information by acquiring it using improper means, and by copying it without authorization. It also prevents Samuelson, a former Move.com employee, from using and sharing any trade secret and confidential information gained while employed at Move, Inc., and from specific activities key to his new position at Zillow.

In the suit, filed March 17 in state court in Seattle, Move alleged Samuelson’s vast knowledge of its trade secrets and strategies will make it impossible to function in his new job at Zillow without divulging Move’s trade secrets. In other words, his hands are tied in some specific areas and he really cannot do the job he was hired to do at Zillow. The bombshell ruling:

o Prohibits activities relating to obtaining direct data feeds of listing data — which I’m sure Zillow was hoping he could improve.

o Prohibits activities relating to developing contact relationship management (CRM) tools

o Prohibits activities which would circumvent ListHub

As you know, Zillow is depends on those list feeds for the millions of  listings it churns into content that yields an estimated 46 to 48 million eyeballs a month and has made Zillow the leading online real estate web site. Hell, those may be more eyeballs than many news organizations are getting. Zillow has been marching quite aggressively as of late, and just yesterday I read that Zillow is now handling the real estate search at MSN Real Estate, which used to be handled by Move Inc. This comes after Zillow began powering the searches at AOL Real Estate.

Two major online media company searches and two executives — Zillow is beginning to remind me of Jabba the Hut in Star Wars!

But of course, also smart for Zillow: if they control every real estate search in the world, that makes even more eyeballs to look at real estate listings which they can then sell ads on to Realtors.

Just last week I was talking with a seasoned group of agents about how Zillow sells ads to agents, and how those “shark ads” pop up against properties those agents are not listing. However, some of the large real estate behemoth brokerages are now are inking deals with Zillow to actually keep those sharks at bay:  Douglas Elliman Real Estate, the U.S.’s fourth-largest brokerage, started marketing more than 9,000 listings on Zillow last week under a new marketing agreement that guaranteed Elliman’s listings would head to the top of search results on Zillow’s website. The agreement also guarantees that just Elliman’s listing agents will be featured on their listings on Zillow — no sharks.

Coldwell Banker has a similar agreement with Zillow.

What does this mean for locally owned brokerages and agents? Watch out! Wake up! The big guys are flexing their muscles and doing stuff the little guys can’t do alone. But today’s ruling may cool Zillow’s jets, at least for a few weeks.

 

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owitz steaming hot, mostly because Samuelson left without notice.Rob Hahn, a Houston-based real estate consultant and blogger who once worked for Zillow, actually got Berkowitz on the phone and asked, what gives? Why no notice?