Zillow Acquisition Looming?

Realtor.com was sold for $950 million to News Corp. in 2014, but a source closely familiar with Zillow is now saying that the world’s third largest real estate website might be coming up for sale again. This time, the highest bidder might be their #1 rival: Zillow.com

An acquisition of Realtor.com would be the biggest since Zillow’s $2.5 billion take-over of Trulia is 2015 and would provide this internet super-power significant leverage, not only in negotiating access to local listing data, but also in increasing prices for advertising space for aspiring agents and teams. Local MLS boards and associations alike are likely going to try to block such a merger.

Local MLS boards are likely going to try to block such a merger.

Real Estate is not the first industry to go through a major consolidation phase on the online front. The online vacation rental market saw a similar transition when Home Away essentially bought up all major websites, offered short-term rentals, and controlled the supply altogether. They successfully increased the prices across all paying users by over 400%.

But if prices were to go up that significantly on Zillow’s products after an acquisition, substitutes for Zillow’s services such as Google Adwords, Yelp, and Instagram will likely see a significant jump in revenues. In fact, after Zillow acquired Trulia and updated their pricing model, both Yelp and Google saw double-digit growth in their real estate verticals.