Tag Archives: trulia

Zillow to Buy Trulia; Will Pursue Twin Brand Strategy

Zillow is buying Trulia, its chief rival, for $3.5 Billion in stock. The two companies – both nine years old — have a lot of overlap currently. But after the deal closes in 2015, they will seek to develop two differentiated marketplaces for real estate-related information, which includes house sales, rentals, mortgage and related national and local advertising.

As the acquiring company, Zillow would focus on “top of funnel” awareness advertising. Trulia, meanwhile, would focus more on specific agent-related, final purchase (or rental)- related advertising. According to ComScore, Zillow attracted 83 million unique visitors in June, while Trulia attracted 53 million. Roughly half of Trulia’s visitors do not visit Zillow.

The proposed purchase price, roughly $70.53 a share, represents a 25 percent premium over Trulia’s current stock price. Combined revenues from both companies could produce $721 Million in 2015 under present conditions, according to estimates by Benchmark Research. Separately, the companies estimate $100 million a year in cost savings by eliminating redundancy. Under terms of the agreement, Trulia CEO Pete Flint will report to Zillow CEO Spencer Rascoff.

In our view, the primary goal of the acquisition isn’t to build the one-two punch of differentiated real estate sites, or even to maximize cost savings from eliminating overlap. Mostly, it takes Trulia out as a rival company, and per GeekWire, it also ends apparent merger talks between Trulia and Move.com, the #3 Real Estate site that controls the NAR’s Realtor.com site. (It also isn’t the first time Trulia has considered selling itself. Google apparently was interested in buying the site in 2009 when it was pursuing a major listings effort).

Over the next several years,the effort to differentiate the two sites make more sense than to collapse them into one brand. Such a strategy would be reminiscent of what AutoTrader.com has accomplished with KBB.com; The Weather Co. has accomplished with Weather Underground; and what Match.com has accomplished with the purchase of several dating verticals.

Winning national advertising dollars is especially viewed as a key growth area. Zillow has budgeted $45 million in marketing dollars this year to accelerate that effort. Zillow, perhaps best known for its controversial Z-Estimates, sees a unique advertising market among speculative home browsers, targeting everything from landscapers to auto companies. Trulia, meanwhile, has been less controversial than Zillow in the Realtor community and might be a better brand for Realtors to work with.

Will there be anti-trust issues? Both Zillow and Trulia tend to draw from Realtors and brokerages that are digitally minded in their advertising. Zillow head Rascoff, however, suggests that the market is nascent and represents less than 3 percent of the $12 Billion market in real estate advertising.

We don’t know about that. The reality is that the two companies actually tie up a great deal of the linkages between real estate advertising and distributors, such as the search engines, local media companies and others. But ultimately, it probably falls short of real anti- trust concern.

Zillow CEO Spencer Rascoff at a recent BIA/Kelsey conference

Zillow Starting to Add Realtor Reviews

On average, people only move every six years or so. So there aren’t likely to be as strong a list of reviews of real estate agents as there is for pizza. But that hasn’t stopped Zillow from adding reviews of real estate professionals to its Directory.

The company started collecting reviews in December and now says it has “thousands.” The reviews are connected to an agent’s Zillow profile, providing a richer picture for potential Realtor advertisers. The agent’s answers to various consumer questions are also part of the profile, as it is with Trulia’s Directory.

The drive to have more reviews is something that is felt across verticals. It is among the biggest reasons, for instance, why Angie’s List sponsors its Big Deals – to add reviews to its home and trade profiles. In a release, Zillow CEO Spencer Rascoff says that “Agent Reviews are another huge step towards transparency for buyers and sellers.

When visitors use the Zillow Directory to search for a real estate agent in their area, results are sorted by local agents with the highest overall ratings and greatest number of reviews. Ratings are on a 1-to-5 basis, with 5 being “very likely” to use again, and 1 “very unlikely”.

Consumers can compare agents’ overall ratings, as well as ratings across several categories of service including: process expertise, local knowledge, responsiveness and negotiation skills. Along with ratings, qualitative reviews further help consumers understand a former client’s experience with that agent.

Homethinking, which launched in 2005, has had some experience with agent reviews. But it tightly integrates the reviews with the agent’s transaction history, providing more of a 360 degree picture.

Real Estate: Are Multiple Listing Services Ready to Compete for Consumers?

With the rise of consumer-facing real estate sites such as Realtor.com, Zillow and Trulia, it seems only natural that Multiple Listing Services would break out from behind the Realtor and brokerage firewalls, and provide truly local, for-profit real estate sites, complete with advertising and features.

Houston Area Realtors has been perhaps the most prominent MLS to do this. Another is MRIS, the mega-MLS covering the entire Washington DC. Metro area. Another large MLS that has had a consumer facing site is Multiple Listing Service of Long Island, NY, which has been active on the consumer side for over seven years.

MLSLI has a friendly site, complete with standard features such as neighborhood and school information. But now, the 20,000 agent-strong MLS, which is owned by the Long Island Board of Realtors and serves Nassau, Suffolk and Queens, says it is ready to overhaul its site for the social and mobile generation. Working with Local Matters, which has been focusing on the MLS market, MSLI says that its new, locally customized site will be up in 90 days; in time for spring, which is the peak house buying season.

MLSLI VP of Operations Jim Speer tells us the site will help spur his members to work more effectively with social media such as Facebook and Twitter. Many Realtors have been effectively using social media, but there is a still huge chunk that don’t. It will also include Zillow-like automated valuation models for homes.

The site will also be more agent-centric. “On our website, users will click on a listing and get direct access to agents and their office listing,” he says. “It is really a straight path to our agents and brokers members.”

Speer, however, believes the site will only be enhancing the role of the agents and brokers. It will probably never be a big revenue maker, he says. “Maybe it will offset some of our dues. But we don’t sell anything to our members,” he said. “There won’t be featured listings or advertising.”

Trulia Asks: What Do You Think of This Neighborhood?

Real estate and rental agents get into big trouble if they mouth off about a neighborhood’s quality of life issues. The most they can do is point to web sites that provide some general stats (i.e. school info, crime stats and market trends).

Now Trulia is getting deeper, a la user generated content. Three weeks ago, it launched ratings on 12, well-researched quality of life issues. Ratings are provided on a one to five star basis, and include safety; pet-friendliness; walkability; restaurants & shopping; parks & recreation; schools; traffic; parking; entertainment & nightlife; public transportation; community involvement; and cleanliness. Users may submit their ratings via mobile or Internet. So far, more than 140,000 ratings have come in.

Today, Trulia added reviews as well. The site is asking users to “tell us about the surrounding area, be it the neighborhood, sub-neighborhood, or actual block. The more local your knowledge, the more helpful it will be to another person! Do you live on the coolest block in your city? Tell us about it. Does your neighborhood have the best restaurants and stores? We want to know.” Over time, the site hopes to showcase its aggregated local area ratings, and reviews for every neighborhood and every block.

Think about your own neighborhood. Would you have been able to use something like this? I would have. After seven years, I have learned that my neighborhood is very safe, relatively pet-friendly (except for the lurking Coyotes), and has excellent shopping and restaurants that are nearby, but requires a car to get to. Other than dining, it has no nightlife. It has good schools through middle school, but the high school is in the tougher, adjacent town. It has very good parking, lots of tot lots, two pools and weekly block parties for young children but no other community involvement. It is also quite clean.

It might not be the neighborhood for everyone. Most of this would have been picked up by Trulia’s ratings system, which has been expertly thought out by its research team.

Trulia Branches Out into Rentals

Trulia, which is ranked a Top 7 real estate site by Comscore, has followed the lead of Realtor.com and Zillow and added rentals to its site. The rentals section features all of Trulia’s functionality, such as neighborhood information, mapping and ratings information, and filters for relevant searches such as “pets allowed.”

The site also offers “search on the go.” Roughly ten percent of Trulia’s usage now comes from mobile devices. Trulia’s mobile Web site is compatible with the iPhone, Blackberry and Android platforms.

Trulia rentals covers the gamut from multifamily to houses. Listings will come from Independent Listings Services, as well as from brokerages and landlords. There are “millions” of units on the site at launch, with more than 25,000 in New York City.

One advantage of Trulia rentals, per CEO Pete Flint, is Trulia’s ability to assume hosting duties for listers including the hosting of contact info, images of units and floor plans, and other information. That separates Trulia from some of the rentals aggregators in the market, such as Oodle, he says.

Flint notes that 30 percent of the site’s visitors are typically looking to either rent or buy. The market trends are “absolutely in favor of renting,” he says. Overall, rentals “are as large as the ‘for sale’ business.”

Separately, in an interview with Business Week, Flint deflected rumors that Google has been looking into buying the company. Trulia uses many of Google’s features and it would seem to be a nice fit. But Flint told BusinessWeek that the real estate market isn’t strong enough to appreciate the site’s full value this year.

As an alternative, the company is looking for an outside investor that would let employees and owners cash in their shares without waiting for an initial public offering, similar to Facebook’s arrangement with Digital Sky Technologies, a Russian company; and Yelp’s arrangement with Elevation Partners.

Inman NYC: Google and Trulia?

Rumors have been flying that Google is poised to buy Trulia, “the real estate search engine” that competes with, among others, Zillow (which just said it is aiming to IPO in 2011).

But according to reports by attendees, no information was forthcoming at Inman’s 2010 Real Estate Connect conference in NYC, where Google Director of Local and B2B markets Sam Sebastian addressed the audience. Sebastian did note however that “we’re actively looking to acquire one to two companies a month.” (Note: This is a corrected quote, per an investigation by Greg Sterling. A previous version suggested he had specifically said “real estate companies.”)

The Trulia rumors have been partially fueled by the development of Google’s new Place Pages, a merchant profile feature that could theoretically be used develop a national Multiple Listings Service, competing with Realtor.com. If that were the case, Trulia would probably help enlist agents and brokerages.

But there is “not some evil plan we have in Mountain View, with millions of folks talking about how we want to take over the real estate markets,” said Sebastian. And there really are no plans to focus on Place Pages for real estate.

Sebastian did note, however, that brokerages were finding out Google’s advantages on their own. “Agents have always been pretty engaged in buying keywords and targeted ads from Google to drive traffic to their Web sites,” he said.

Trulia, itself, reports that it has come off a gangbuster year, with 62.3 million unique visitors, and 45 percent more visits, and 105 percent more page views. Along with increased engagement, Trulia reports that “consumer interest in homes exploded, with nearly 1 million home buyer inquiries sent to real estate agents in 2009.”

MerchantCircle Tries to Get Stickier with ‘Neighbors’ and ‘Answers’

MerchantCircle is seeking to transform itself from a source of search engine leads for SMBs into more of a destination site that consumers and businesses will use over and over again.

The company reports 20 million unique visitors, which if calculated in a certain way, would make it the fifth largest Internet Yellow Pages. It also has over 900,000 small businesses that have “claimed” a page and may use the company’s robust tool sets and features.

While MerchantCircle already provides a number of features, such as Yelp reviews, just a small percentage use the site as a reference site, akin to an Internet Yellow Pages. Company officials now hope to change that with two new programs: “Neighbors” and “Answers.”

Neighbors — not to be confused with Yahoo! Neighbors, which also launches today — enables consumers to “follow” local businesses, Twitter style, for the latest promotions, coupons and announcements. Business owners can use the feed to communicate directly with their customer base and share information on deals and other things. Deals, especially, reflect one of Merchant Circle’s strengths, since its merchants use the service to publish thousands of coupons.

Answers is a consumer advice service, similar to ones we’ve seen with Yahoo Answers and vertical sites such as Avvo.com (lawyers) and Trulia (real estate). Merchant Circle’s idea is that small businesses will become more bonded to the service if they regularly communicate with potential customers. It says it has already had excellent response rate in a month of trials.

One would think that MerchantCircle may not be ideally positioned to provide such a core consumer service. But company officials note that its strength is not in the Yelp markets such as San Francisco and Los Angeles, but rather in small to medium-sized markets, perhaps up to 150,000 population, where it has achieved a viral effect of businesses recommending each other.