Between them, Zillow and Trulia have a very large share of the market for online real estate listings. Real estate brokers who want to advertise their services next to online listings of houses for sale have few other choices. Zillow and Trulia have considered merging. The two firms argue that real estate agents have many ways to advertise their services beyond online listings, including mailing out advertising or placing ads in local newspapers. The CEO of Zillow was quoted in an article in the Wall Street Journal as arguing that the advertising market is "incredibly fragmented." He also said that "agents have a lot of choice in terms of where to advertise listings."
a. Wouldn't you expect the CEO of Zillow to emphasize the effectiveness of advertising on his site as opposed to other ways of advertising? Why, then, would he publicly argue that real estate agents have many other ways of advertising?
b. How would federal regulators go about evaluating a merger between Zillow and Trulia?