Zillow to buy Trulia

Zillow's purchase of Trulia has been confirmed.

Trulia makes almost as much revenue as Zillow. Trulia and Zillow have been level-pegging on most metrics for a few years, then Zillow suddenly flicked the turbo and both audience and market cap increased a gap to Trulia.

So if you're worth more, why not use that advantage to buy the competitor that is most like you while they are cheap (relatively speaking).

The key to this is Market Leader, the back-end software company that Trulia bought. Market Leader makes a lot of money selling a lot of software to Real Estate Brokerages and Agents.

In one fell swoop, Zillow would double its revenue, get a hold of Market Leader and get Trulia's online audience.

But that's where the problem is: How many people use both Trulia and Zillow? 

Assuming that a lot of Americans do in fact use both, is this an expensive acquisition of audience that Zillow already has?

Also, the Real Estate Brokerages and Agents that are forward-thinking enough to pay Zillow, probably also pay Trulia too. Bummer.

I'd like to see this transaction. Online property portals are a very cheap way for Real Estate Agents to acquire buyer and tenant leads. I think the revenue potential for online property portals is several orders of magnitude larger than what agents pay today.

While the 900 or so MLSs in the US stayed fragmented, giving Zillow a chance to steal a march, agents in the UK are fighting back. Rightmove, the UK dominant portal easily palmed off the Zoopla challenge. And while Zoopla has done well (£65m revenue, 18,000+ agents and a £1bn market cap) the UK's number 2 portal is about to haemorrhage customers when Agents' Mutual (3,000 branches and counting) launches OnTheMarket.com next year.

US Brokerages, Agents and MLSs take note: you're stronger together. Especially across state lines.

Here's the story on Bloomberg News: http://www.bloomberg.com/news/2014-07-24/zillow-said-to-be-seeking-to-buy-rival-real-estate-site-trulia.html