About two months ago everyone saw the huge news about Trulia and Zillow making their plans to merge. However, since that date, both stocks have seen nearly a 30% decline. Is there a real reason for this or are people not seeing the value? Maybe it was insider information that people knew News Corp was poised to buy Move Inc. if it’s planned purchase of Trulia didn’t happen.
Well, it happened, and it became official that Move Inc. would be selling to News Corp to be bundled with a huge syndication network that will be instrumental in the marketing of properties. There are many pieces in motion, so I’ll break them down one by one.
Trulia and Zillow
The merger of these two giants sent shockwaves throughout the industry. Accounting for over 125 million views each month is nothing short of amazing. Together, they were poised to be a single place where consumers could come and search for properties, get mortgage rates, research neighborhoods and school information, as well as find an agent to work with. In theory, they would be a one stop shop for your home search experience as a consumer. They have leveraged the agents information and found a way to sell their own customers back to them.
However, with great access to information, comes great responsibility. They have made it clear they are not looking to become an MLS and they are not interested in becoming any sort of brokerage. But has their time as an internet giant come to an end with another merger on the horizon? I doubt it, but I do think agents will have to think long and hard about where their marketing dollars are spent.
Move Inc. (Realtor.com) and News Corp
While it may seem to some that this merger comes out of left field, it actually makes a lot of sense. News Corp owns many newspapers and websites, and while it was little known, they were bidding to buy Trulia at the time Zillow announced a deal had been made. In a true Murdoch way, he went ahead and bought the next best thing. I personally see it as a hugely strategic move that could seriously disrupt the business Trulia and Zillow do. Now that a merger between News Corp and Realtor.com (The most accurate of the listing portals) is on the horizon, it also allows mass syndication that could seriously improve the amount of exposure a real estate agent gets on every single listing.
The preliminary findings are actually showing that NAR will retain control of Realtor.com while not owning it. This is a huge win for them as they will no longer have the expense of running it, will be added to an already huge network of digital and print media, and will allow NAR to focus more on its members then on a site without the type of support News Corp can provide.
Realtors® will benefit from both mergers, but now have a real choice as to where to spend their advertising dollars. Both models run with the understanding the agents are the one footing the bills for leads, and will continue to do so. We can see why NAR wouldn’t object to this merger as they did with the Trulia and Zillow one. But this does open the door for the SEC to quickly approve the merger between Trulia and Zillow as there is now a very large competitor in town.
If you’re in the luxury side of real estate, this merger also plays a huge role for you. News Corp owns the Wall Street Journal as well as the luxury magazine Mansion. Through this merger, we could see a huge uptick in the limiting of these types of properties on Trulia and Zillow and more focus to work with Realtor.com and its partners.
Only time will tell…