Death match for US property portals
News Corp and Zillow deal differently with challengers CoStar and Compass.
A titanic, three-year battle between CoStar's Andy Florance and Compass' Robert Reffkin over the future shape of the US$10 billion ($15.5 billion) US residential real estate advertising market is drawing near to conclusion. When the dust settles, the major owners of the established US property portals – News Corporation, REA Group and Will Vicars' Caledonia Investments – are praying their hitherto cosy positions remain intact.
Caledonia is the largest shareholder of Zillow, the number one residential real estate advertising portal in the USA, its 19 per cent holding worth a tad under US$3 billion. News and REA share ownership (on an 80:20 basis) in realtor.com, the number two player in which they have invested more than US$1.5 billion over the past decade. News, of course, owns 61 per cent of REA (operator of realestate.com.au).
While Zillow and Realtor are confident that Florance and Reffkin will fall flat on their faces trying to disrupt deeply-ingrained industry practices with their challenger-style business models, the value consequences of either man succeeding would be stark.
