As a consumer and not professionally connected to the real estate industry, I was still interested in reading the big real-estate news that Zillow Inc. has agreed to buy Trulia Inc. for $3.5 billion. So immediately, I thought that Zillow plans to go straight to the consumer after the merger and cut out the realtor, especially since the founders had disrupted the travel industry with Expedia and Hotwire.

But Zillow claims that they are not out to rock the real-estate industry model. Spencer Rascoff, the CEO of Zillow has maintained that Zillow and Trulia are media companies, not real-estate brokerages. They regard the real-estate brokers as their customers.

As far as the average consumer is concerned, we are still looking to buy or sell homes through agents, but we now use the tools provided by online websites such as Zillow and talk to our realtors after doing some preliminary research. We in turn expect our agents to be marketing our homes using their entire suite of tools which would include a savvy online presence. So this merger may not affect us directly.

Real-estate professionals are more wary of this merger and are concerned about higher advertising costs. However, regardless of the messenger, whether it is Zillow or Trulia, big data is here to stay for the real estate industry. These sites offer data analytics in insightful, actionable format and the real estate industry needs to view them as marketing allies not their competitors (as yet).

So how do Zillow and the other websites add value using data? According to this Mashable article, the companies mine census information, consumer surveys, listings, geographic information data and combine with their own proprietary user-generated content to create a customer’s property's potential value and help them understand trends. But the interviewed realtors state that calculations don't take into account recent sales, developer incentives, community developments etc. and thus the online valuations are usually inflated.

MarketWatch reported that only about 15% of real estate professionals can afford to use Zillow or Trulia. There is definite scope for improvement to increase the company’s customer base. With this merger, the new company should look at ways to work with the real-estate industry in a more collaborative fashion by exploring solutions to questions such as:

How can the results be made more accurate - what other pieces of data can be used?
What customized information does the user (realtor, consumer) need?
How can the other players such as lenders be brought into this marketplace?

The win-win scenario would be for Zillow/Trulia to provide more accurate and meaningful analytics while providing a wider reach for the realtor, thus emphasizing its role as a real-estate media company. Only then will the realtor see value in spending money on these sites.

And as a consumer, I expect my service provider to leverage the most effective resources available to bring value.