Earlier this week, an interesting debate broke out on TechFlash after we reported on a dispute between a Seattle plumber and the online directory service HelpHive. The crux of the issue centered on whether HelpHive's system of creating a separate phone number for the businesses listed in its online directory -- including the plumber's -- was a valid business tactic.

Now, the debate is raging again in a slightly different form. And this time it could have bigger consequences. Seattle online real estate powerhouse Zillow.com recently announced the implementation of a fee structure for its Zillow Mortgage Marketplace. As part of the change, Zillow, like HelpHive, has started to offer a separate 1-800 phone number for lenders who are listed in the online marketplace.

In the Zillow forums, irate lenders had some choice words to say about the new fees and the new phone numbers.

"So we paid $25 to be a CONFIRMED lender, yet our info has been removed and replaced with a bogus 888 number that Zillow can record and track, no longer do we have an email address or any type of contact info," wrote one.

Some of the lenders also have complained that the phone calls were not properly re-routed to their actual phone numbers (also a complaint of the plumber in the HelpHive case). Others, quite obviously, didn't like the idea of being charged for leads which for the past 19 months have been given away for free.

Zillow Chief Operating Officer Spencer Rascoff said there's a big difference between what HelpHive is doing and Zillow's new offering. Zillow already has a pre-existing business relationship with every lender listed in the Mortgage Marketplace, he said. As noted above, lenders pay $25 to participate in the marketplace.

"If I were a service provider and I woke up one day and saw myself on a Web site with a different phone number that I didn't have a relationship with, I'd be perturbed as well," said Rascoff. "But honestly, this hasn't been an issue. To the extent we are hearing objections from any Marketplace participants, it is not about the phone number system. The phone number is just a tactical way to know when to decrement the lender's account. We have certainly have heard from lenders who don't want to pay for contacts because they loved that we were free."

Online lead generation -- something Zillow dubs "customer-initiated contact" --is a big business. And Zillow.com -- which has historically made its money through online advertising -- appears to be looking to find new ways to drive revenue off its user base. Launched in April 2008 as a free service, Zillow says that borrowers are now submitting about 50,000 loan requests a month through the site.

Rascoff

With Zillow now looking to earn anywhere from a few bucks to $100 on those individual leads, this new business model could be a sizable revenue generator. Say of the 50,000 loan requests -- which are bid on by lenders through an auction-type system -- 20,000 resulted in a contact between the borrower and the lender. At an average of $25 a pop, that's $500,000 in revenue per month.

Some of the leads flowing through the system will still be listed for free. And Rascoff said since the pricing structure of the leads will be set via an auction, he's got no idea how much they will sell for on the site. But he thinks it could be a big business, and possibly take market share from the big dog in the industry.

"We are half the size of LendingTree right now in terms of loan requests ... and they have been at this a decade and they've spent almost $1 billion in advertising," he said. "And we think we've just come up with a better model. It is much more consumer friendly ... and it is much more lender friendly."

[Hat tip to TechCrunch]