In this interview segment, Speaker B explains how Zillow’s acquisition of Trulia—an all‑stock deal worth roughly $2 billion—was pivotal for shifting Zillow’s monetization from a fixed‑price lead‑generation model to an auction‑based system akin to Google’s ad auction. The increased scale and removal of a primary competitor enabled auction dynamics, driving growth. The deal required a protracted FTC antitrust review, involving ten months, 26 trips to Washington, and extensive sworn testimony, but ultimately received approval as the combined entity was not deemed a monopoly. Speaker B also shares a cautionary lesson about the discoverability of internal communications (Slack, email, WhatsApp) in legal proceedings, urging executives to avoid documenting speculative or incriminating statements about market power or future mergers. The discussion blends strategic business insight with practical legal advice for corporate communications.
Chapters
I'm glad you actually mentioned as far as the acquisitions, right? Later on with Trulia. So could you maybe share more around that and just kind of like how that, I guess, kind of fit within the strategy of Zillow?
Buying Trulia was really instrumental because we were the number one site, they were the number two site, and we paid a couple billion. I think it was an all-stock deal, two-thirds, one-third all stock. So we gave them about $2 billion of stock in Zillow. But the reason that it was so important was it allowed us to shift the monetization model from a fixed price lead gen business to an auction lead gen business. So we were basically, we always wanted to be like what Google is in search. And the genius of Google is from a consumer standpoint, the genius of Google is that it's a really good search engine. From the advertising standpoint, the genius of Google is the auction. And, you know, when the CPCs for Los Angeles real estate are $4 CPCs, Zillow doesn't get mad at Google. Zillow gets mad at the other competitors that bid the auction up to $4 CPCs. So nobody blames the auctioneer. And so we always wanted to switch our ad model from a fixed price where we were calling the real estate agent saying, sorry, there's a price increase. It's now $100 a month or $120 a month or, You know, some, we were CPC, CPL, CPA, which all sorts of different business models, but we were always increasing the price as our traffic grew. And that's a really hard conversation. It drives churn. So we wanted to shift to an auction. Buying truly allowed us to have enough scale and take out a main competitor that allowed us to have, create auction dynamics, which is why the Google auction works because they have 90% market share in search. We spent 10 months arguing with the FTC, the Federal Trade Commission, that it wasn't going to create a monopoly. I believed it wasn't going to create, I still believe it didn't create a monopoly. I mean, there's plenty of real estate search engines and plenty of places for real estate agents to advertise, so it's not a monopoly. And that's why eventually the government agreed with us, but it took 10 months and I think 26 trips to Washington and hundreds and hundreds of hours under oath. And it was a complicated transaction to get approved, but when we did, it was instrumental in the company's growth. Actually, there's a good lesson here for you, which is if any of you think that you will ever, well, almost no matter what you do, anything that you write in Slack, in text, in WhatsApp, in email, you should assume will eventually be discoverable in a lawsuit, in an antitrust hearing, in whatever. And, you know, the lawyers call the things that you wish you hadn't written, they call them bad docs. You know, do you have any bad docs? And like, we had some bad docs. We had like a binder, it's probably still here somewhere. Actually, it's right there of like thousands and thousands of papers of email and Slack messages, stuff. And, you know, under oath in front of the FTC, they'd be like, well, 3 years ago there was some, you know, some board meeting or something where you, you know, you talked about how Trulia was a competitor and they had this percent market share. Like what everything you write, Will eventually come out, and there were a couple things that I wish I—it wasn't that bad. But like I, you know, I'd called some of my competitors internally some names and said, you know, people were, you know, some said some bad things about some people, which then I had to apologize for. So that wasn't great. But mostly from a business standpoint, you just want to make sure that you never write anything like, oh gosh, if we could ever merge with Company X, then we would finally have a monopoly and we could charge whatever we want. Ha ha ha! Like, don't write that. Um, and you'll, you'll regret that. I didn't actually, I didn't, we didn't have anything that, that egregious, but that's the type of thing you want to be thoughtful about.
