My Own Pirate Radio

The Globe and Mail published a story this morning on the Competition Bureau’s investigation into alleged anticompetitive behavior in the Canadian real estate industry.

In a court filing, Jean-Pierre Bornais, a senior competition law officer, said 90 per cent of residential resale transactions in Canada involve the MLS database. He added that information already obtained by the bureau from industry participants indicates that the changes enacted by CREA “have restricted, and will further restrict, access to the MLS database, and have prevented and limited and will further prevent and limit, the entry and expansion of potential competitors.” The inquiry will determine whether CREA “has engaged in, or is engaging in, a practice of anti-competitive acts,” he said.
…
At CREA’s annual meeting this weekend in Ottawa, delegates approved a series of proposals that tighten listing rules and prevent homes from being put on MLS without follow up by the agent. Mr. Linney said the changes will go into effect despite the bureau inquiry.
…
Last November, one of Canada’s largest online realty services, Toronto-based Realtysellers Ltd., shut down “pending a resolution of the Multiple Listing Service issues.”

Read the full Globe story here. Read the post I wrote last week here.

I just finished reading “Miles Lives per Gallon: The True Cost of Our Oil Addiction”. It’s an interesting book by Terry Tamminen, who is a special advisor on environmental issues to California Governor Arnold Schwarzenegger. In the book he tries to tally up the fully burdened cost of oil on society, including externalities like health costs and “defense” spending that aren’t a part of the price tag we see at the gas pump. It’s pretty data heavy, which I find appealing. That said, as in the Big Tobacco wars, it’s difficult to conclusively tie things like health problems directly to oil, except in the most glaringly obvious cases (e.g. Exxon Valdez cleanup, or pollution in Nigeria’s Delta region). While most of the book is grim, in the last few chapters he does offer some sunshine in the form of concrete suggestions on what you can do to reduce your usage of oil products.

It’s worth a read.

Updated 2007/03/24: corrected title of the book. Thanks Terry. (How embarrassing; to be caught in a typo by the book’s own author.)

Advertising continues to evolve. It used to be “cost-per-impression”: broadcast TV and radio ads, junk mail, billboards, banner ads. Then we got “cost-per-click”, the business model that powers most search engines today. Now a few companies are trying “cost-per-action”, where the advertiser pays only when a click on an ad leads to an action they define… like buying a product.

Google is apparently rolling out a broad trial of pay-per-action with some of their advertisers.

Because they are often paying for actions more likely to lead to sales than would a simple click on a link to a Web site, cost-per-action ads are often more expensive than cost-per-click ads. McGovern says that, on average, advertisers pay about 100 times more for a sale than they do for a lead on a customer, which is arguably what a click is. For example, an advertiser who is willing to pay 5¢ for a click on its baseball card ad is likely to spend $5 or more for a user who buys a baseball card.

This new approach will certainly have its challenges — new types of fraud, for instance — but I hope it goes well. Anything that more closely aligns advertising with results is good… it’s a step towards what we might call “efficient advertising”, and away from the spam-the-world approach that has dominated to date.

Now if we could just figure out how to make pay-per-action work with all that junk mail… hmmm.

I’m interested in the general theme of competition and consumer advocacy, especially as it relates to Canada and the US. Having lived in both countries I find it frustrating that Canada generally lags behind the US on this point. For example, the US rolled out its National do-not-call registry in June 2003. Canada still doesn’t have one, and its looking like 2008 before we do. Or consider mobile phone number portability, which the US initiated in 2003. Canada finally rolled out MNP just a few days ago, to the sound of… well, nothing, from the mobile phone giants. They must be hoping nobody will notice.

So it was with pleasant surprise today that I read Competition Bureau officers are “talking and meeting with limited-service brokers in the United States to gauge the potential effects of real estate restrictions in Canada”. (Read the article today if you’re interested… it goes behind a subscription wall after 24 hours.) The US DOJ and FTC have been looking into anti-competitive real estate policy and legislation driven by the National Association of Realtors (NAR) and several US states for the last year or so. It’s nice to see Canada doing a fast-follow on this one.

What’s the DOJ all fussed about? Their main bone of contention is so-called “minimum service” laws, which make it illegal for real estate professionals to provide limited service offerings (which cost less) to their clients. For instance, advertising a home for sale on the MLS and allowing the customer to handle the rest of the transaction is now against the law in 10 US states. The FTC and DOJ have voiced concern about this, advising the states that such rules will probably be deemed anticompetitive. The DOJ has also filed a lawsuit against NAR objecting to “overly restrictive” online property listings policies. The battle has been joined.

Why should Canadians care? Well, it turns out that CREA, NAR’s Canadian equivalent, has been trying to impose similar rules on its member MLS organizations for the last half a year or so. The Inman article cites several Canadian discount real estate companies that are struggling in the face of CREA rules, including Realtysellers, co-founded by Stephen Moranis, ironically a former president of the Toronto Real Estate Board and director of CREA. Realtysellers announced in November 2006 that it was suspending operations pending resolution of the CREA issues.

CREA recently backed off on passing formal regulations, but it’s taking another stab at it next week, this time with its policies recast as “interpretations” of existing CREA rules. The interpretations document is up for vote at CREA’s general meeting on March 24. In a nutshell, it implies that Realtors (CREA members and trademark users) cannot provide limited service offerings, cannot “merely list” properties on the MLS, and must remain middlemen at all times in real estate transactions … whether their clients want the help or not. Furthermore, property sellers’ name and contact information cannot appear on the MLS.ca website. You can see the proposed interpretations on the Real Estate Marketing web site.

Consumer choice is good. CREA should acknowledge that and change its tune, before the Competition Bureau forces it to do so.

For free.

On Tuesday, school officials revealed plans to make available the university’s entire 1,800-course curriculum by year’s end. Currently, some 1.5 million online independent learners log on the MIT OpenCourseWare (OCW) site every month and more than 120 universities around the world have inaugurated their own sites for independent learners. MIT has more than 1,500 course curriculums available online to date. more…

Bravo!

Interesting also to read that South Korea thus far has more people than China learning from MIT online.

A year and a half after launching their new search engine, Microsoft’s US market share in web search has declined from 13% to 9%, while Google and Yahoo! both gained. Microsoft is treading water while the market overall has grown. Here are the share numbers.

Yesterday brought more bad news for the Windows Live Search team: VP Christopher Payne is leaving Microsoft to start his own company.

It’s hard to imagine how to spin this one positively. Christopher was one of the first to pitch Bill and Steve on building a new search service in-house rather than continuing to outsource to Yahoo!. He played a huge role in recruiting key people to the team, creating a vision, and integrating marketing, business and customer focus into what was undoubtedly a pure engineering team. And as you can imagine, his business performance goals were tied in no small part to gains in market share and profitability. So this is not just the departure of the chief cheerleader and visionary; it’s a sign that success in search is not coming nearly as fast as Microsoft had hoped.

Having been on the team myself I have mixed feelings about this changing of the guard, and I imagine many of the people I used to work with are feeling the same way. When a key leader heads for the door you stop and question what keeps you there. Is it your passion for the technology and business challenges? Your allegiance to the company, the leaders, the team you helped build? The paycheck? How does that stack up against the negatives of the job? (Unless things have changed radically, the main down sides were: unattainable performance expectations pushed down from above, grueling hours, and a maddening culture of prima donna behavior that was tolerated and even rewarded.) Most importantly, how does all that measure up against time you could be spending doing something else? It’s worth doing that math once in a while.

Of course, the search battle is not over. In fact, it’s barely begun. But it will continue to be uphill for Microsoft. From the Seattle PI, March 5: “You have to think that, with the heavy lifting behind it, Microsoft has got to be in a good position to execute, and execute well,” Nielsen NetRatings’ Cassar said. “But they’re competing against two of the strongest companies, between Yahoo and Google, and so Microsoft can’t just execute well. Microsoft needs to execute in an extraordinary fashion in order to just keep pace.”

Good luck to all the warriors.

update March 8: Danny Sullivan gives some history on search at Microsoft.