Everyone is Very Excited about Zillows' New iPhone App…Auston?

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First, I will start with a confession: I am not of the iPhone-borg. Therefore, I will not debate the quality or the value of the new Zillow iPhone application. Zillow’s CEO Rich Barton announced the launch a few days ago and everyone seems very excited:

But, behind the scenes of all this excitement Zillow may be killing opportunity. There is a tiny little back story emerging around the launch of the Zillow iPhone app (hat tip: Joseph Ferrera)–it wasn’t the first.

Here is a quick synopsis of iZillow and Auston Bunsen (via: Sellsius Real Estate):

Last year in May I created an iPhone interface for Zillow’s “zestimator” – it was all fun and games, got a little bit of blog coverage/mentions & an overall good response. Zillow seemed to be all for it.

Then the New York Times included it in one of it’s articles – and Zillow asked me to very simply put the words “unofficial version” and a link at the bottom of the app.

No problem. Done. (link added)

Joseph Ferrera eloquently takes you down the legal path and gives a good primer on trademark law. I want to take you down another strategic path–the power of free software development.

Here are a few key points in this controversy:

  • Zillow provides an API (application programming interface) for software developers
  • Typically, this is done to encourage the creation of (a lot of) creative and interesting applications
  • Software engineers get to leveraging the value of your platform and/or data
  • API owners get more users looking at the value of their platform and/or data
  • This is the juice behind Web 2.0

Software engineers love to create. Often, they are artist. They develop and innovate without regard for the monetization of their creations. They value users using their software, over payment.

Treated well, given a good API, and a little support–they will build thousands of apps, introduce thousands of customers, or enhance the experience of thousands of customers. All to the benefit of your business. Want proof?

Even more importantly, each of these applications creates sticky customers! Ask users of iPhone, Firefox (especially), Twitter why they don’t switch to alternatives. Answer: they can’t live without the apps or plug-ins.

Here is the point: Defend your trademark. However, don’t use your API developer community as competitive intelligence or test marketers. If you do, you will lose a valuable developer network and potential market share.

What are your thoughts? I didn’t interview Auston or Zillow–did I miss some facts (Auston, Drew, or David)? Do you think Zillow is giving up opportunity for a single iPhone app? Do you this Zillow handled the issue well?

UPDATE (via FOREM):

Good news today, however, as the situation seems to have been resolved.

A statement received by this blog this afternoon reads:

We reached an amicable agreement to purchase the URL. I don’t want to discuss the agreed price but it’s more than the $250 he 1st requested.
He can continue to run the site with different branding. Pity this got unnecessarily heated; other than this, Auston seems like a good guy.

Kudos to both parties for being able to come to a friendly agreement.

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