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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

July 8, 2010 at 9:01 PM

Zillow hooks up with Yahoo on ad deal

Everyone’s been wondering if Zillow would someday hook up with one of the big Web portals.

Now it’s finally happening, sort of.

Under a deal being announced Friday, Zillow is going to become the exclusive partner of Yahoo Real Estate, handling real estate advertising for both sites. The two are also combining their listing directories.

Zillow and Yahoo aren’t marrying, but they’re now in a pretty serious relationship.

The companies run the second and third largest Web real estate sites in the country, according to comScore data they provided. It pegged Zillow’s May traffic at 7 million unique visitors and Yahoo Real Estate’s at 6.1 million uniques.

Linked together they’ll pose a bigger challenge to the category leader, Move.com. Move, which includes Realtor.com, drew 12 million uniques in May.

“For Zillow this is a seminal announcement in our four-year history because it effectively doubles our size,” said Spencer Rascoff, Zillow chief operating officer.

For-sale listings bought on Zillow will automatically appear on Yahoo Real Estate. Yahoo will continue to handle its own display and search ads sold to companies such as home-improvement stores.

Executives from both companies wouldn’t comment on how this might affect Zillow — Seattle’s best-capitalized Web startup — going public or being acquired someday by Yahoo or someone else.

Zillow and Yahoo Real Estate have had a smaller partnership since 2006, when Yahoo began using Zillow’s Zestimate house value estimations on its site.

The sites will continue to look different to consumers, but they’ll have the same ads, explained Steve Schultz, head of Yahoo Real Estate.

It sounds a little bit like the join operating agreements that newspapers in the same market used to combine business operations, such as the arrangement that had The Seattle Times handling advertising for the Seattle Post-Intelligencer for 26 years until 2009.

Rascoff and Schultz wouldn’t say how long their deal will last, but they expect it to take effect in the fall.

Comments | More in | Topics: realtor.com, yahoo, Yahoo!

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