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Nearly two weeks after CoStar Group made an AUD 2.7 billion offer to purchase REA Group rival Domain, News Corp CEO Robert Thomson finally gave his 2 cents on the deal at Morgan Stanley’s Technology, Media & Telecom Conference.
If CoStar purchases Domain, Thomson said the Virginia-based commercial giant’s growth plan would likely hinge on spending an eye-popping amount on marketing to lift the real estate classifieds firm’s traffic. However, Thomson said News Corp can leverage its global media portfolio — which includes the New York Post, The Wall Street Journal, MarketWatch, and dozens of other domestic and foreign publications — to offset marketing costs.
Robert Thomson
“We have the comparative advantage in these competitive markets of having media properties,” Thomson said, according to Financial Review. “And in the world when search is fundamentally changing because of [artificial intelligence] … your ability to create a ‘network effect’ with your own sites — to be able to drive traffic to Realtor.com from MarketWatch, be able to drive traffic to REA in Australia from news.com.au — that’s a huge advantage.”
“So not only in a commercial sense, but in an editorial sense, you’re able to move traffic around,” he added.
REA Group has been Australia’s leading real estate platform for over two decades. In REA Group’s latest half-year earnings report, the company saw its revenue increase 20 percent year over year to AUD 873 million, with net profits rising 26 percent to AUD 314 million as Australia experiences a pop in new listings and sales activity. Traffic to REA Group’s residential portal, realestate.com.au, reached 12.4 million unique monthly visitors in January based on Ipsos data, keeping it solidly in the No. 1 spot.
CoStar could reasonably leverage Domain Print’s relationships with The Sydney Morning Herald, The Age, and The Australian Financial Review to maximize whatever financial investment it would put into the portal — that’s if Nine’s board of directors warm up to the multibillion-dollar offer.
Domain, which is owned by Nine Entertainment, also logged a solid performance in its latest half-year earnings, with revenues increasing 7 percent year over year to AUD 217.2 million. Nine didn’t provide exact traffic statistics but said Domain experienced “double-digit growth in unique audience and listing views.” Domain’s digital businesses, which include advertising solutions and three real estate print magazines, were flat for the half-year, the earnings said.
“As has been reported, last week Domain received an unsolicited, non-binding indicative proposal from CoStar Group,” Nine’s earnings release read. “Domain is of strategic importance to Nine’s media ecosystem and our long-term growth strategy. As Domain’s controlling shareholder, Nine will consider the CoStar proposal with a focus on the best interests of Nine shareholders.”
As explained in a previous Inman article, CoStar began buying Domain stock on Feb. 13 for AUD 4.20 per share, which represents a 34.6 percent premium based on early February closing price trends in the AUD 3.00 range. Domain’s price per share has risen since CoStar’s offer, closing at AUD 4.39 on March 4. CoStar’s stock rush, which was done with the help of Macquarie Capital, has given it a 19 percent stake in the Australian portal.
CoStar’s offer comes as Nine embarks on a massive restructuring of the company’s executive board and divisions to save AUD 100 million over the next two years. Nine reduced its divisions to streaming and broadcast, publishing and marketplaces, the latter of which includes Domain and automotive content platform Drive.
Despite the swirling news, a CoStar has remained relatively silent on the potential deal’s details. “CoStar Group continuously evaluates M&A opportunities across a broad range of companies to maximize shareholder value,” a CoStar spokesperson told Inman on Feb. 20. “We do not comment on market rumors or speculation.”
The Domain news continues an ongoing battle between CoStar, News Corp and Realtor.com, which began when CoStar purchased residential portal Homes.com in 2021. In 2024, the company spent $1 billion on marketing for the portal. CoStar’s efforts have kept traffic to Homes.com Network — which includes Homes.com, Apartments.com and Land.com — steady with 110 million monthly unique visitors.
“Andy [Florance is] a great competitor himself,” Thomson said. “… And so you can certainly spend a lot of money on marketing, but what we can do, really without spending money, is networking.”
