Good afternoon —
CoStar Group reported fourth-quarter earnings yesterday, beating estimates with $35.8 million in profits for the quarter. During the earnings call, CEO Andy Florance talked about the company's failed takeover bid for RentPath, which led to some interesting insights about Zillow.
"The inflection point for us came down to our learning of a non-public rumor that a household name Internet giant shared their plans to launch a marketing solution that would be more directly competitive with both us and RentPath. While the giant intended to partner with us, they would clearly provide a potential competitive alternative. We felt in the face of the giant entering this space, it was unlikely that the [FTC] would find that RentPath stand-alone represented any material or significant competitive impact, hence we felt the deal was likely to clear."
Who is that "internet giant?" Florance goes on:
"However, during the process, the giant drew significant antitrust scrutiny of their own. And we have reason to believe that in conversations with the government, the giant pledged not to enter our space. As a result, three things happened. One, the giant did not enter our space, which is really good news. Secondly, the antitrust analysis and acquisition of RentPath shifted out of our favor, which was bad news. Third, in the [FTC's] opinion, they stated that their investigation concluded that Zillow was not an effective competitor to Apartments.com which we enjoyed."
Ah yes, the relief when the internet giant has pledged not to enter your space! But this part is notable: "While the giant intended to partner with us, they would clearly provide a potential competitive alternative." Partner used there as a verb, not a noun, clearly. Read the whole story here.
Until tomorrow —
Sarah Wheeler
HousingWire Editor in Chief
P.S. As promised, the first episode of our Honest Conversations podcast is live, below!! It's a must-listen!
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