NEW YORK – Feb. 25, 2015 – ListHub’s announcement last week that it intended to stop supplying listings to Trulia set off warning bells in the investment community, with one analyst telling investors that Trulia could lose 40 percent of its listings.
A California judge on Tuesday granted Zillow Inc. a temporary restraining order to forestall ListHub’s action. Zillow completed its acquisition of Trulia on Feb. 17.
In a report on StreetInsider.com, Deutsche Bank analyst Lloyd Walmsley called the Zillow lawsuit “flimsy.” He said it appeared Zillow would not be able to use its direct Zillow agreements with data providers to power Trulia listings; instead, it would need to renegotiate each Trulia agreement.
The sudden loss of listings may also weaken Zillow’s negotiating position with brokers who seek conditions (e.g., ad blocking or preferential pricing), Walmsley said.
“Bottom line – this appears to be something Zillow did not have in its play book and stands in stark contrast to its protestations that it did not need ListHub made days ago,” Walmsley said in the StreetInsider.com report.
A hearing on Zillow’s restraining order is set for March 12, and ListHub will continue to provide Trulia with listings at least through that date.
Meanwhile, Move Inc., which operates realtor.com® and ListHub, can use the Zillow restraining order to back up its statement that it has the most accurate real estate listings in the industry.
“We look forward to another ‘liberating moment’ for Zillow on March 12, when we will have the opportunity to make our full case in court,” Move Inc. said in a statement. “In the meantime, we are happy to continue supplying the industry’s best data.”
Last week, Zillow completed its acquisition of Trulia in a $2.5 billion stock-for-stock transaction. Zillow said it plans to eliminate 350 job positions due to its acquisition of Trulia.
In other developments, Trulia Chief Economist Jed Kolko announced that he would be departing his post later this spring. Kolko joined Trulia in September 2011 and served as a frequent commentator on the conditions in the housing market.
Kolko said that despite his departure from Trulia and the company’s acquisition by Zillow, the Trulia Trends team would continue to provide commentary and research on the state of the housing market. Zillow also has its own in-house research team.
Kolko is unsure what his next move will be. Prior to Trulia, Kolko was a researcher at the Public Policy Institute of California and Forrester Research Inc.
Sources: “Trulia Economist Kolko to Leave Following Zillow Purchase,” Bloomberg News (Feb. 23, 2015), “Zillow (Z): ListHub Issues Look Problematic, Lawsuit Flimsy, Says Deutsche Bank.” (Feb. 23, 2015)
Reprinted with permission Florida Realtors. All rights reserved.