I spoke yesterday with Zillow’s CFO/VP of Marketing Spencer Rascoff. We talked about their newspaper deal and had a friendly conversation. However, he disputed my characterization of the newspapers’ deal with Zillow as a “hedge” vs. Yahoo! Rascoff says that there was essentially an RFP process and Zillow basically won the real estate business vs. other potential partners.
Rascoff thinks that process will happen again with Autos. Rascoff’s remarks, I told him, would seem to be at odds with the sweeping nature of the language in press releases like this:
The companies have embarked upon a wide-ranging relationship unique in the newspaper industry in its combined scope. It will leverage the complementary strengths of the newspaper consortium and Yahoo! to deliver significant localized content and advertising opportunities to their customers.
Yahoo! and the consortium have initiated plans to work together in the following capacities:
Advertising: Use Yahoo!’s technology platform to sell online advertising for the newspapers’ Web sites.
Search: Use Yahoo!’s search monetization functionality on newspaper Web sites, such as Web search, downloads of the Yahoo! toolbar and sponsored search.
Local: Offer Yahoo!’s local products such as Yahoo! Local listings, Yahoo! Maps and Event Listings on the newspaper Web sites.
Content: Use Yahoo!’s extensive network to distribute the newspapers’ content in areas such as Yahoo! Search results, Yahoo! News and other content verticals.
Rascoff and I also talked about the second phase of the deal, which involves Zillow hosting the real estate sections of these newspaper sites. That part is substantially TBD.
On the one hand it’s smart (on the newspapers’ part) and analogous to what many newspaper sites are doing with partners like Zvents. They are clearly not in the position to create best-of-class technology platforms and applications on their own (individually that is). But it may signal that newspaper sites will effectively become shells that outsource much of their content or many important sections of their sites to third parties.