Zillow Blog broke the news last week that the online real estate portal is partnering with 280 local newspapers to suck their classfieds listings down into their database. From Zillow’s press release:

The newspaper companies included so far in the consortium are Hearst Newspapers; Journal Register Company; Lee Enterprises, Incorporated; Media General, Inc.; MediaNews Group, Inc.; Morris Communications Company, LLC; Paddock Publications; Pittsburgh Tribune-Review; The E.W. Scripps Company; Times-Shamrock Communications and The Day Publishing Company. Newspapers include major market dailies such as The San Francisco Chronicle, Houston Chronicle, San Jose Mercury News, The Tampa Tribune and the St. Louis Post-Dispatch.

This is a smart move for Zillow – though unfortunately, the exclusivity of the partnership may have been eclipsed by a similar content/ad deal announced this week by Yahoo!

It extends their brand down to the local level while reaching out and giving newspaper advertising people a potential way to juice up their print classifieds sales (which are anemic at best). It also of course, allows Zillow to build a more complete online database of homes on the market by bringing in more listings and FSBOs.

A big challenge here for Zillow is that with so many sources of listings; agents, homeowners, broker feeds and now newspapers, accuracy becomes a bit of an issue – making sure a price change on a property from a single source correlates properly with the others. Zillow’s got smart people on staff so I’m sure they’re working on it.

The most interesting part of this deal is speculating about the future however – a time where Zillow may essentially white label its services (search, Zestimates, community) to the newspapers and just take over their online real estate pages. This is something Greg Sterling at Screenwerk alluded to in his interview with Spencer Rascoff, Zillow’s VP of Marketing and burgeoning blogger.

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.

Trulia has already started going down this road (see Tipping Point for Trulia?) and it makes sense for Zillow to follow. There’s no doubt, most newspaper’s online real estate sites are in dire need of help and could use some of its Web 2.0 savvy.

I’m not sure the big publishers would be comfortable surrendering all that control to Zillow but it could be a very attractive opportunity (through a revenue share) for the smaller cash strapped papers and for Zillow a way to bridge that “last mile” (to borrow a telecom term) and get its brand in front of everyday consumers.

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