The world of online real estate is officially entering a new age. What was once a three-way battle for consumer eyeballs and agent advertising dollars between Zillow (Z), Trulia and Realtor.com is now a one-on-one fight.
In one corner sits the newly formed Zillow Group, which includes Zillow and Trulia, and in the other corner sits Move Inc., which operates Realtor.com for the National Association of Realtors and is owned by News Corp (NWS). And the two companies are prepared to fight it out for complete and total domination of the market.
Trulia and Zillow may currently boast bigger audiences than Realtor.com, but what they don’t have is the backing of multi-billion dollar international business empire.
And with News Corp’s acquisition of Move finalized in November, Realtor.com has a head start in its push to take down the Zillow Group.
Those two factors are big reasons why new Move CEO Ryan O’Hara said he’s ready for the battle ahead.
In fact, O’Hara has already begun to rally his troops, telling Move’s employees Tuesday that he expects to see Zillow and Trulia suffer through “digestive issues” as the companies integrate their operations.
And O’Hara said that those issues are a big reason why he sees 2015 as “the year of the surge” for Realtor.com.
O’Hara shared his views on Move’s future in an email to Move’s employees, which was obtained by HousingWire.
“The fact is that while federal regulatory approval was an arduous process for our competition, their real work begins now,” O’Hara said in the email to employees.
“And history suggests that the ‘digestive issues’ associated with combining two similar companies – consolidating overlapping audiences, streamlining operations, driving cost efficiencies, and eliminating redundancies in people and processes – chew up time and focus,” O’Hara continued.
“By contrast, Move’s merger with News Corp combines the power of two distinct, but highly complementary platforms and results in a multiplier-effect that we expect will provide added impetus to the business and make us even stronger competitors.”
O’Hara told his employees that he actually views the direct competition with the Zillow Group as a positive for consumers and the industry, because the two companies will push each other to become better performers that are “more focused on the customer, quicker to innovate, more committed to adding value at every stage of the real estate cycle.”
O’Hara also said that he believes online real estate is a great business to be in right now.
“Today, the Internet is the first place people go when they have an interest in real estate. Providing consumers and real estate professionals with vital information and services online remains a big growth opportunity in an increasingly connected, anytime/anywhere world,” O’Hara said.
“In addition, current macro factors are extremely favorable: improved employment, rising GDP, easing mortgage restrictions and growth in housing starts are just a few of the trends creating meaningful tailwind for the market.”
So how does O’Hara plan to take on Move’s biggest competitor?
First, by continuing to offer the “most comprehensive and accurate” listings.
“How will we compete?,” O’Hara said. “By continuing to build the best web and mobile experiences for consumers and the best and most valuable tools for brokers and agents, and by providing the market with the most comprehensive, most accurate and most up-to-date listings in the U.S.”
O’Hara said that he believes that Realtor.com’s accuracy is one of the main reasons the site has grown recently.
“Realtor.com is extremely well positioned to compete and thrive in this environment of industry consolidation and data-driven customers,” O’Hara said.
“We offer the most comprehensive and accurate listings in America, and we generate the highest-quality leads in the business,” O’Hara continued. “On top of this (perhaps because of it) we entered 2015 with impressive business momentum – brand awareness up more than 25%, web and mobile traffic up more than 30%, and 11 consecutive quarters of year-over-year revenue growth.”
O’Hara also said he believes that consumers and real estate professionals are “awakening” to the realization that Zillow and Trulia’s promises of shortcuts and discounts actually cost them more in the long run.
O’Hara also promised that Move will begin to quicken the pace of product innovation and “apply more marketing muscle to our consumer and industry outreach.
Upon the completion of the $2.5 billion acquisition of Trulia, Zillow CEO Spencer Rascoff said that he’s ready for the competition.
“When we started Realtor.com had a massive advantage. Out of nowhere Zillow and Trulia surpassed it,” Rascoff said Wednesday. “The current competitive environment – there still is a lot of competition but not more or less than last 10 years. I like our chances. We have great people and great brands and a running head start. But we are not resting.”
Rascoff also called out Move for providing less accurate listing data to Zillow through Listhub, which is owned by Move.
“When we announced we were parting ways with News Corp we were constrained on being reliant on a competitor for listings,” Rascoff said Wednesday morning. He said Listhub sent inferior listings to emphasize that Move’s Realtor.com had “higher quality listings.”
When Zillow announced that it was canceling its deal with Listhub, a Zillow spokesperson told HousingWire that it expects a “few hundred thousand” out of the 3.6 million listings currently on Zillow to be affected when the Listhub agreement ends on April 7, but said that Zillow is attempting to contact all of the potentially impacted MLSs to secure listing agreements to avoid any listings disappearing from Zillow.
As for Move, O’Hara said he’s ready for what ever comes next.
“When we do all of this, we execute on our vision of putting real estate at the fingertips of today’s information-driven consumer and enabling real estate professionals to provide their customers with indispensable and personalized service,” O’Hara said.
“And that’s how we win.”
