News of the Zillow-Trulia merger hit the real estate world like Chris Farley doing a cannonball. The $3.5 billion deal will bring together the two largest real estate web portals, which, together with their partner networks, account for more than 70 percent of all real-estate related Internet traffic.
Thought the deal is not expected to close until 2015, the ripple effects will be deeply felt. According to figures from web data tracker ComScore, the two sites’ combined traffic in June was nearly triple that of third-ranked Realtor.com, which is operated by Move Inc. The play is an avowed attempt to monopolize the consumer-facing real estate web space, much in the way that InterActiveCorp (IAC) has acquired a suite of the most popular online dating services, including Match.com and Tinder, Zillow CEO Spencer Rascoff told investors and analysts in a conference call announcing the deal.
That’s precisely what worries some in the industry.
“We are concerned that this merger could provide fewer choices to consumers and lead to higher advertising costs for Realtors and their clients,” 2014 MAR President Peter Ruffini, regional vice president at Norwell-based Jack Conway & Co., said in a statement.
Falling In Line
Many real estate agents have long bitterly resented the two sites, feeling that they are forced to advertise on them to in order to acquire leads generated by the agent’s own hard-won listings, and in the wake of the news, online commentators renewed calls for agents and brokers to pull their listings from the sites. But through scattered handful of brokers and MLSs across the country have taken that step in recent years, there has been little indication that a substantial number will follow.
Instead, over the past 18 months, both portals have pushed hard to acquire direct feeds from brokers and MLSs, ensuring their listings data will be fresher and more accurate. Their efforts have met with some success, with both sites signing deals with hundreds of brokers. Rascoff said on the call that that push would continue, and seemed confident that the two portals command sufficient attention from consumers that few brokers would dare to abstain from the sites.
“It ought to be quite clear to a listing agent or their broker that it behooves their seller to have their listing on Zillow or Trulia. It’s almost inexplicable to me how a listing agent could say to their seller that their listing is not on these websites, and I think that increasingly, the industry has reached that conclusion – that the client is the seller, and it benefits the seller to be on these websites,” Rascoff said.
That the sites have gained such a powerful position in relation to the industry provoked a burst of doom and gloom from some online commentators, with Inman News founder Brad Inman writing that the deal was “checkmate” in the chess game between brokers and the portals, while pot-stirring blogger and consultant Rob Hanh declared that the “syndication wars” were over, noting that various industry efforts to provide an alternative to the portals have been underway for months and are not yet off the ground, while the Zillow-Trulia deal was negotiated in a mere six weeks.
Email: csullivan@thewarrengroup.com
