We told you this was up last week. Well Inman broke the story this morning with a Tweet I got around 8 a.m. which means it was only 6 a.m. in California. While the John Wiley Price et al arrest of the “Texas Four” is all anyone is talking about at the water cooler today, you might want to shift your radar over to this:
Zillow announced today that it’s entered into a definitive agreement to acquire its chief competitor Trulia for $3.5 billion in stock.
The companies will maintain their separate brands, with Trulia CEO Pete Flint staying on board and reporting to Zillow CEO Spencer Rascoff. Although the deal has been approved by both companies’ boards of directors, it’s not expected to close until sometime next year. When the deal closes, Flint and another Trulia director will join the combined company’s board of directors.
What does this mean for our real estate market, Realtors, agents and brokers? A lot, a whole lot. Changes, more than you can imagine. I’ve been reading reactions all morning and need to get you some answers. Forthcoming.
But you really have to give Zillow credit. They have won the hearts and minds of consumers, and they have marched ahead with heavy, designer boots keeping their eye on a very singular ball. The first thing that comes to mind is my meeting with Pete Flint (above) at a Connect a few years ago. He is British. I think a Zillow-Trulia marriage is going to take real estate to not just a national level, but an international level. The disruption is coming to traditional media:
“The industry is more fearful of change, technology,” Flint told me, “We at Trulia are not in the business of disrupting the real estate industry. We are in the process of disrupting the newspaper industry.”
Wow. And here all along some Realtors thought they would be replaced by the internet now that 99% of all real estate search begins on line. Some still may be. One thing’s for sure: agents will be rated and their work made quite transparent by this merger. It will totally separate the men from the boys.
But Trulia and Zillow don’t want to put the Realtors out of biz; they (it) want to suck up ad revenue.
Tell me about print media, I asked the 39 year old, British-born Stanford Business School graduate who created Trulia in 2005 when he found it difficult to shop for housing on line. (Trulia was valued at about $200 million back before the bust, now has about 400 employees, and there has been talk of finding outside investors and going public, as Zillow did a week or so ago, though Flint’s lips are clearly sealed in that topic.)
Flash ahead to five years –what will the print publishing world look like?
I think the middle market will disappear, Flint said without blinking an eye. The large papers will survive — USA Today, The Wall Street Journal, The New York Times, etc. There will still be small community newspapers if they offer relevant niche content with appeal. It’s the regionals that will suffer, those that mix local news with non-relevance. The middle, says Flint, will be gone.
As for Real Estate, Flint outlined three major forces re-tooling it:
Technology has totally transformed the real estate industry, and mobile search is going to be THE primary search mode — that is, people will look for homes on their tablets and phones, while out in the field.
Data –there is an abundance of data, but most lacks context. Data needs to be turned into easy to understand stories, not necessarily written word stories, but interactive maps, video, pictures, like Trulia’s popular heat maps.
And Real Estate will be very human, as relationships are integrated into social network relationships (like the new app). According to NAR, said Flint, 40% of consumers find their agents by a personal recommendation.
“We have digitalized word of mouth,” he says.
If you are in social media be afraid, be very afraid. FaceBook is like a big, huge party and everyone’s invited. Companies that focus on delighting the consumer, accelerating value and utilizing great technology, will thrive. Real Estate will remain high on the radar despite our current down-turn because often a home is the single largest financial purchase in an individual’s life.
“It’s incredibly emotional,” says Flint.
And the real estate industry is incredibly emotional today, too!