Zillow Sues Trulia Over Website Estimates

Zillow sues Trulia over website estimates

SEATTLE – Sept. 14, 2012 – Drawing from the “How to Mess with Your Competitor’s IPO” playbook, Seattle-based real estate website Zillow has filed a patent lawsuit against rival Trulia.
The suit, filed Wednesday in federal court in Seattle, comes a month after the San Francisco-based competitor launched plans for an initial public offering of stock to raise $75 million.

Zillow obtained a patent in June 2011 for its approach to refining its so-called “Zestimate” – a calculation of a home’s current market value – by allowing the homeowner or others to add to the data used for its projection.

A few months later Trulia debuted its own “Trulia Estimates” feature, which also allows website visitors to provide input for a property’s valuation.

The suit claims Zillow’s patent is infringed by what it terms “Trulia’s blatant and ongoing copying of Zillow’s innovative approach to home valuation.”

Aaron Kessler, who follows Zillow as an analyst at Raymond James in San Francisco, said the suit “highlights there are maybe some hard feelings” between the companies.

But he doubts the litigation will cast much of a cloud over Trulia’s pending IPO. “It doesn’t help, but I can’t imagine it’s a big overhang to the story,” he said.

Trulia’s head of communications, Ken Shuman, said it doesn’t comment on litigation. The company hasn’t responded to the lawsuit in court yet.

Both websites use the free home-value estimates to draw eyeballs to their websites, and make money from charging real estate brokers to advertise their listings or services.

ComScore data from July shows Zillow drew 13.5 million users to its website for PC users, while Trulia attracted 12.5 million.

Trulia, which last week upped its IPO goal to $115 million, reported $29 million in revenue and a $7.6 million loss for the first half of this year. Zillow reported $50 million in revenue and $3 million in net income for that period.

Copyright © 2012 The Seattle Times, Distributed by MCT Information Services.

Source: © 2012 Florida Realtors®


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