Newspapers Form Alliance with Zillow.com
- by Mark Walsh @markfwal, November 14, 2007
Under the agreement, local advertisers who run print and online "for sale" and open-house ads with the newspapers will also have the option to share listings on Zillow, which has 1.5 million registered users. Newspapers will also be able to incorporate Zillow features into their own sites, including the company's "Zestimates," or estimated valuations of homes nationwide.
Participating newspaper publishers so far include Hearst Newspapers, Journal Register Company, Lee Enterprises and MediaNews Group. Large market newspapers owned among the 11 newspaper companies include the San Francisco Chronicle, the Houston Chronicle and the San Jose Mercury News. More newspaper publishers are expected to join the group before it launches in the first half of 2008.
Financial terms of the deal were not disclosed, but it's expected to include an ad revenue-sharing arrangement between Zillow and its newspaper partners.
The Zillow partnership comes a year after many of the same publishers forged an alliance with Yahoo--focused on giving newspapers the ability to place local help-wanted ads on the Internet portal's HotJobs career site. The Yahoo group is now up to 21 newspaper companies and nearly 400 newspapers, most recently adding The New York Daily News.
Both online efforts are aimed at offsetting fast declining readership and ad revenue in the newspapers' print businesses. The publishers have reckoned that it's better to join forces with erstwhile Internet rivals than compete against them. "To me, it's a clear indication that newspapers are finally moving beyond the mentality that 'we have to protect print,'" says Peter Zollman, founding principal of Classified Intelligence. "While print isn't dead, it's badly wounded."
While the Yahoo partnership to date centers on job ads, the Zillow deal is all about real estate listings, a key source of newspaper ad revenue. Launched in early 2006, Zillow has quickly gained a large following through its instant online home valuations and extensive housing-related data. The company says it currently has nearly 400,000 total listings, including nearly 300,000 homes for sale.
Given the turmoil in the mortgage market and forecasts for a slowing economy, the timing of the real estate ad agreement is less than ideal. But it's also a sign of how desperately newspapers need to find new avenues to bolster ad sales.< P> Left on the sidelines is Yahoo, which has a separate partnership with Zillow for its real estate section, but isn't part of the company's newspaper alliance. "While the news is important, it may not be as important as the fact that Yahoo! isn't part of the deal," wrote Peter Krasilovsky, program director for marketplaces at the Kelsey Group, a local media and advertising consultancy.
He suggested that by not partnering with Yahoo on real estate listings, the consortium might want to indicate "that Yahoo serves only at its pleasure." Krasilovsky indicated that Zillow may have been a more attractive choice because of its efforts since last year to aggregate listings from brokers including ERA and ReMax Allegiance.
Reports of yet another online newspaper surfaced recently involving Gannett Co., Tribune Co., Hearst, Media News Group and Cox. They would form a shared ad sales force that would provide "one-stop shopping" for ad placement on the Web sites of large-market newspapers.
