👉 Background: Domain is the real-estate marketplace that started in 1996 as a real estate lift-out section of Fairfax newspapers. It launched its first website with digital property listings in 1999 and has grown to become the second most popular real estate listings platform - behind Realestate.com.au, which has 46% more monthly unique visitors.

‍👉 What happened: Last Thursday, a mystery buyer bought up a 20% stake in Domain. This buyer turned out to be CoStar, the world’s largest real estate information company. On Friday, CoStar announced plans to submit a takeover bid, valuing Domain at $2.7 billion which is more than 42% premium on its average share price from the past month.

👉 What else: On the back of this news, Domain's share price skyrocketed 37% - but on the other side, REA Group’s share price fell more than 10%. Because suddenly their unassailable lead has become... assailable.

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‍What's the key learning?

💡Market leaders can never allow themselves to get comfortable, no matter how big they are. When a cashed-up competitor enters the scene, it can change everything. CoStar is a global behemoth - it's listed on the Nasdaq with a market cap of nearly $50 billion USD.

💡Last month, REA Group’s CEO shared his secret for smashing Domain - he claims they out-invested  Domain on everything from tech to product development to people. But, here’s where it all changes because with a new potential owner Domain could afford to drop prices, pump millions into marketing, and invest heavily in tech.

💡This is a blueprint that CoStar has tried and tested around the world already. For example, it spent $US1 billion to take its Homes.com portal from number six in the market to number two. And it also did the same in the UK, where it acquired the second-placed property marketplace OnTheMove and 5x’d its marketing spend. So, if this deal does go through, REA Group and its investors might still have the same competitor - but in brand new armour.