The NY Times (and others) are reporting today that Zillow is going to acquire Trulia for $3.5 billion in stock. This is a massive merger that will no doubt effect massive change in the real estate media landscape. This news is not surprising given Zillow CEO Spencer Rascoff’s goal of “[creating] a portfolio of real estate properties, becoming more along the lines of an IAC/InterActiveCorp.”
The comparison to a media holding company such as IAC is a good one. Zillow’s primary innovation has been to bring real estate marketing online. Now, their path to future growth is to get more eyeballs on their content via acquisition.
And by all accounts, the new Zillow has a healthy market opportunity in front of it:
“The revenue of the merged company — $341.2 million last year – represents only a small part of what he [Rascoff] reckons is the $12 billion the real estate industry spends on marketing each year.”
However, this isn’t going to do much to affect the way actual real estate business is conducted.
Zillow is a real estate marketing company, but the real estate industry is not primarily a marketing business. Zillow may be content to own this niche, but there are much bigger opportunities out there to innovate in real estate.
Property management is a $69 billion annual business in the US alone. A big chunk of what property managers do could be conducted online, but currently isn’t.
Real estate development and investment is a order of magnitude larger than that, and is vastly under-served by the incumbent software and data offerings.
And yet, relatively few startups have attempted to serve these markets.
At Kwelia, we’re excited to capitalize on Zillow’s missed opportunity. We’re building the data platform that powers true innovation in real estate, and we’re starting with rental housing data. If you’re ready to join the next wave of real estate innovators building on our platform, drop us a line.