Yahoo and Zillow Solidify Partnership, Creating Large Real Estate Ad Net

Yahoo has expanded its relationship with Zillow, moving ahead with its broader mission of focusing on national advertisers and leaving the local long-tail to partners. The deal, to be implemented later this year, makes Zillow the exclusive sales partner to existing home sales advertisers on Yahoo. The companies expect the partnership to simplify the process for agents and brokers who now need only supply listings data to one company instead of two.

The partnership effectively forms the largest real estate ad network for existing home advertisers. Ad products offered by Zillow such as its enhanced listings and profile pages for agents will now also be included on Yahoo Real Estate placements. Zillow’s for-sale listings, showcase ads, and featured listings will also be fed to Yahoo’s site. Home sellers can also place for sale by owner listings on both sites with one buy. The two companies will begin coordinating sales now, though they plan to implement the partnership fully in the fall.

“We’ll be providing a pipe of listings to [Yahoo” for them to integrate into their search experience,” said Zillow COO Spencer Rascoff. Zillow’s small, local agent listings will complement Yahoo’s inventory, since Yahoo does not work with advertisers with fewer than 5,000 listings.

The deal combines two of the largest real estate listings sites, resulting in the most market share among top sites in the segment. According to Hitwise, Yahoo Real Estate and Zillow rank second and third among top real estate sites. In June, Yahoo Real Estate held second place with a 4.6 percent share of visitors while Zillow grabbed third place with a 3.8 percent share. Realtor.com tops the sector, garnering a 5.7 percent share in June. Rent.com and Trulia.com rank fourth and fifth on Hitwise’s list.

“We’re going to continue to sell to and foster relationships that we have at the national advertiser level,” said Steve Schultz, head of Yahoo Real Estate. In other words, Yahoo will continue to sell directly to national advertisers like banks and financial services firms operating in the real estate sector.

The two will also combine forces on Yahoo Real Estate display ad sales to agents, brokers, and new home builders. As the logistics of the deal are hashed out, the companies currently are deciding whether Zillow will use Yahoo’s APT platform for display ads.

Zillow and Yahoo have worked together since 2006, when Yahoo began featuring Zillow’s median home prices and property value estimates in its real estate section. The two firms have partnered separately with many of the same newspaper site publishers – Yahoo to supplement its job listings and offer its display inventory to local advertisers, and Zillow to sell display ads into newspaper sites and open its own inventory up to local ads sold by its paper partners.

“The relationship brings together two companies that have been sort of dancing together for quite some time,” said Rascoff. “It’s quite logical.”