Technology

News Corp. delivers one-two punch to Zillow Group

As listings battle escalates, will Zillow compete with Move in B2B?

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With Zillow finally swallowing Trulia, the head-to-head portal bout is officially on. News Corp. — owner of realtor.com operator Move Inc. — has thrown the first punches.

In a press release on Tuesday emblazoned with an all-caps headline, Move jabbed that “Zillow’s year of the merge will be realtor.com’s year of the surge.”

The line refers to the time and effort Move execs think Zillow will have to expend integrating Trulia into its business, contrasted with News Corp.’s claims to have jump-started realtor.com’s growth as soon as it closed its acquisition in November.

On Thursday, News Corp. delivered the second half of its one-two punch.

Now that Trulia has joined it’s rival’s empire, Move announced that it would cut off the listings feed Trulia receives from its syndication platform ListHub beginning next week. Zillow was already set to lose its ListHub feed on April 7 when the current agreement expires.

Zillow promptly went to court and asked a judge for a temporary restraining order that would force ListHub to continue supplying listings to Trulia while the legal issues are sorted out.

Meanwhile, Zillow Group CEO Spencer Rascoff has hit the ground running, almost literally. His first order of business involved meeting the new Trulia troops by visiting its handful of offices around the country. He visited Trulia employees at the firm’s San Francisco headquarters on Wednesday and those in its Denver office on Thursday.

And today the company released its fifth national TV ad, which will debut during the Academy Awards on Sunday, Feb. 22 on ABC. It’s a tear-jerker.

Business tool battleground?

As the battle over listings escalates, there’s the potential for a second front in the portal wars: B2B.

But while Trulia and its subsidiaries were developers of heavyweight business tools for real estate brokers and agents, it’s not clear if Zillow wants to compete with Move in that arena.

The tools Move provides brokers and agents include the customer relationship management platform Top Producer, and the lead-gen product TigerLead.

In 2013, Zillow decided not to provide enterprise-level versions of broker and agent technology like a customer relationship platform and marketing tools to brokers and agents.

But with its acquisition of Trulia and its subsidiaries, Zillow Group houses six business brands: ActiveRain, Diverse Solutions, Market Leader, Mortech, Postlets and Retsly.

Rascoff said Zillow will do a strategic review of Market Leader’s broker- and agent-level products over the course of this year to decide whether to keep offering them.

But he said Zillow will continue to fully support the multiyear, enterprise-level agreements Market Leader has to power tech platforms for brokers and agents affiliated with Keller Williams and Realogy.

A big portion of the 280 acquisition-related layoffs on Tuesday hit Market Leader’s headquarters in Bellevue, Washington. It’s now down to 125 employees, Rascoff said.

Hazier views

As stand-alone public companies, Trulia and Move once had to expose their guts to the world with in-depth yearly and quarterly financial reports and calls with investors that turned up insightful nuggets about their businesses.

But no more. With Trulia’s business merged with Zillow’s and Move digesting in News Corp.’s empire, visibility into the inner workings of the two portals is hazier.

Industry relations showdown

With the flow of listings data from ListHub to Zillow scheduled to end in April — and to Trulia as soon as next week — both sites are under more pressure to step up their efforts to secure more listings directly from multiple listing services and brokerages.

On a call with investors on Wednesday morning, Rascoff said he monitors Zillow’s listing count on a daily basis and is comfortable with the firm’s progress.

Errol Samuelson

Errol Samuelson

But as Move emphasizes to consumers in its marketing, realtor.com can claim to have the most comprehensive and accurate listings database, thanks to an exclusive relationship with the National Association of Realtors that’s helped it secure direct feeds from more than 800 MLSs.

Don Flynn

Don Flynn

Zillow will get some industry firepower back when its Chief Industry Relations Officer Errol Samuelson gets back to work next month. A preliminary injunction related to a lawsuit filed by NAR and Samuelson’s former employer, Move, lifts March 22.

Move has beefed up its industry relations team recently to get ready for the industry relations showdown. In January, it added two vice presidents of Realtor association relations: Mark Allen, former CEO of the Minneapolis Association of Realtors, and Don Flynn, former CEO and chief financial officer of the Colorado Association of Realtors.

Stock activity

Company Market cap* Share price* (% change from last week)
Zillow Group $7.20 billion $125.42 (17.8%)
News Corp. $9.86 billion $16.67 (1.6%)

Source: Google Finance *As of market close on Friday, February 20, 2014

Is Pete Flint next?

Trulia co-founder Sami Inkinen, who had served on Trulia’s board of directors after stepping away from day-to-day operation of the company in 2012, is out of real estate altogether now that the Zillow deal is final.

Now, Trulia co-founder Pete Flint has stepped down from his operational role as CEO, but holds a seat on Zillow Group’s board of directors. Will he be the next real estate innovator to disappear from the industry?

Questions or comments? Email Paul Hagey.