Trouble for Terabitz?

Already, the real estate Web site that claims to be “better than Zillow” is stirring up Zillow-grade controversy.

On Tuesday, Inman News reported that Palo Alto-based Terabitz, which launched just last week (see blog), has removed some data feeds from its site after a handful of real estate companies, including San Francisco-based Web site Trulia, accused the company of illegally scraping listing from their sites.

I talked with Terabitz co-founder and chief executive officer Ashfaq Munshi this morning about the complaints. In all, less than half a dozen firms have approached Terabitz to talk about improper licensing of their data, according to Munshi. One was listing site Trulia, which claimed Terabitz was using its RSS (really simple syndication) feed improperly by heavily integrating it into their interface and mingling it with a map. Since the two could not reach an amicable decision, Terabitz removed the data.

But Munshi isn’t too concerned. Terabitz has done nothing illegal, according to his lawyers, and a number of other firms are still interested in doing business with the new company. Moreover, he says, Terabitz is not trying to compete with Trulia. “Our objective is to be very much like a search engine, but really a Web 3.0 search engine,” he said today. “We direct all the traffic back to the listing provider.”

It’s interesting to behold a squabble between two Internet companies in an industry where, up until now, the main disagreements were between brick-and-mortar real estate firms and online ones. It shows just how fast the Internet realty space is evolving.

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