Prospering Amidst the Real Estate Meltdown: Trulia CEO Pete Flint (Part 6)

SM: Newspapers are definitely struggling, especially with their top classifieds such as jobs, travel and real estate.

PF: That market is absolutely gone for them. Most of it has moved online; some of it has evaporated. Total spend has come down. We provide free to list.

SM: Let’s talk about revenues. Given what has happened in the market, what have you seen in terms of your advertisers?

PF: Revenues are growing month to month. Sure, they are growing less than we forecast a year ago but they are growing. From an advertiser’s perspective, you can take that $10,000 you were spending with a local newspaper, cut it down to $3,000 a month and get better ROI.

SM: Are you seeing that shift?

PF: Definitely. We are seeing offline media going online across the board. That gives us the business model. It is like falling off your bike. When you fall off, you make sure you wear your helmet next time. Sometimes it takes big market relocations to force companies to change their advertising allocations. That has happened in recruitment and travel. It is now happening in real estate. Marketing directors are not spending their money with the local newspapers. They are figuring out how to work with search engines and real estate websites.

SM: I have been writing about this for a couple of years now. My entire Web 3.0 thesis is predicated on the verticalization of the web.

PF: I think local is very interesting as well. Historically, local was about a newspaper that served real estate, automotive, and recruitment. Locally is not about serving San Francisco; it is about serving real estate consumers who happen to be in San Francisco. The real estate vertical business is more like consumer services businesses. They can provide a much better service than the newspaper businesses.

While we compete in some respects with newspapers, we have built a surprising number of partnerships with them as well. We announced a big relationship with the Washington Post wherein we power their real estate portal. We provide them with a world-class solution to help them provide real estate information to their consumers. We also collaborate with them on advertising sales.

SM: Is that a revenue-sharing deal?

PF: Primarily yes. The Washington Post deal is a bit more complex because it is a significant deal. We also have 150 different local media partners. Those relationships are such that we provide our technology free, we keep a couple of advertising spots, and they promote a white label version of our service on their site. No money actually changes hands. We spent tens of millions of dollars developing our technology and we can provide it to partners for very little cost.

SM: What is happening from a segment point of view with foreclosed properties and inventory coming onto your site?

PF: It is really a strange market. The medium sales price of every property in Denver is less than $10,000. That is an extreme end, but the same thing is happening all across the US. Investors are coming in and buying up streets of foreclosed properties. It is dramatically changing housing values.

Every market has experienced some form of decline. Some have been just incredible. The boom areas such as Las Vegas and parts of Florida are down incredibly. Other areas are relatively stable.

This segment is part 6 in the series : Prospering Amidst the Real Estate Meltdown: Trulia CEO Pete Flint
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