The owner of the No. 2 U.S. search engine will use the partnership to add home listings, lure users and advertisers, and mount a challenge to Realtor.com
In a bid to beef up its home-buying features and lure local advertisers, Yahoo! (YHOO) is adding home listings from Zillow, an online real estate service that lets users research the value of homes. Pairing with Zillow.com boosts Yahoo's home listings to about 4 million from 3 million and gives the company a bigger slice of the ad market for smaller-sized businesses, Steve Schultz, head of Yahoo's real estate service, said in an interview. "There is a lot of demand to be on Yahoo! Real Estate, but we're effectively not serving that hyperlocal advertising need," Schultz says. "This partnership changes that." The deal also helps Yahoo and Zillow challenge Move Inc. (MOVE), owner of Realtor.com, the most-used real estate site. Yahoo, owner of the No. 2 U.S. search engine, is seeking partners to lure users and revive sales growth. Last month, the Sunnyvale (Calif.)-based company announced an agreement with Facebook that will let its users see message updates from friends on the social-networking site via Yahoo properties. Yahoo No. 3 in Online Real Estate
Until now, Yahoo has focused mainly on selling ads from large marketers, such as mortgage companies and credit agencies, not the local real estate agents that are Zillow's mainstay, Schultz said. In May, Yahoo was No. 3 in the online real estate market with 6.14 million users, while Zillow.com was second with 7.05 million, according to ComScore (SCOR) of Reston, Va. The market was led by Move Inc., with more than 12 million. The Yahoo and Zillow audiences overlap by about 10 percent, said Spencer Rascoff, chief operating officer of Seattle-based Zillow. The companies first worked together in 2006, when Yahoo began offering price estimates for homes based on Zillow's data. The partnership, which creates a new advertising network, will help Zillow distribute its ads and listings to a wider audience, Rascoff said. Yahoo and Zillow didn't disclose financial terms of the new arrangement. The companies expect to integrate their services fully by the end of the year.