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Big changes are coming for the online world of real estate.
In an attempt to increase revenue and expand beyond the newspaper business, News Corporation agreed recently to buy Move Inc. for $950 million.
Move Inc. is the nation’s third-largest online real estate listing company and known for connecting real estate professionals and consumers through its Move Network. It provides consumers support tools and real estate professionals to help them with purchasing a home.
The expansion will help News Corp. grow its digital real-estate listing and become competition for other real estate websites such as Zillow Inc. and Trulia, which are also merging. News Corp. will gain popular real estate websites Realtor.com and moving.com.
Over time, Move may become the largest U.S. online real estate seller, according to News Corp. Chief Executive Officer Robert Thomson. The company is set to gain more than 50 percent in revenue from digital real-estate services.
“Digital real estate is an important pillar of our global digital strategy,” Thomson said on a recent call with analysts. “We believe there is a massive market in the U.S. for online real estate revenue and we believe this market is in its early stage of development.”
With more people using the internet to search for homes, obtaining websites like Realtor.com may help the newspaper publisher, which is controlled by Rupert Murdoch, make a more profitable transition from print to digital. Last month, News Corp. reported quarterly earnings that were projected below analysts’ estimates.
However, the deal with Move Inc. is an immense boost for News Corp. The last time the publisher expanded was in May of this year when it purchased Harlequin Enterprises, the world’s leading publishers of books for women, for $415 million.
Real-estate agents and brokers spend up to $10 billion a year marketing homes for sale, according to some estimates. However, most of that revenue goes toward newspapers and direct mail with only a small portion spent online, which News Corp. views as a way to grow its company.
Although the merger between Zillow and Trulia has raised concerns, specifically by the Realtors Assn., the organization said it supports the deal between News Corp. and Move.
In an interview with Fortune earlier this year, Murdoch said News Corp. considered merging with Zillow and Trulia, but no deal was made because he believed they were overpriced.