Shanghai Daily reports:

Chinese portal Sina.com will form a new venture with online real estate agency E-House (China) Holdings Ltd to build the country’s largest online real estate portal, the companies said yesterday.

Sina will spin off its real estate and home decoration channels and contribute related advertising into the new firm, in which it will hold about two-thirds of the stake. A new Web address will be launched soon for the combined business.

The new portal will use E-House’s China Real Estate Information Circle system, which contains transaction data on land and residences, offices and commercial buildings in 30 major cities in China.

E-House will also develop online products and related fee-based services for the new firm.

E-House isn’t really an online real estate agent, rather it provides a network of sales agents for developers (2500 and counting), provides real estate consulting, and has that much-coveted CRIC database. According to the article, it’s used by 5000 real estate developers in China. They recently signed partnership agreements with four Chinese developers to be the exclusive sales agents for sixteen projects in ten cities. They’re particularly close with Vanke, one of China’s biggest developers.

E-House breaks out its operations into primary real estate agency services, secondary brokerage services, and consulting and information services. Consulting and information services are a small part of the overall operation. Revenue for the first three quarters of 2007 was US$4.3 million (primary real estate services brought in US$59 million over the same period). The deal with Sina is an opportunity to start monetizing that CRIC data by developing search and filtering tools that people are willing to pay for.

It seems to be a reasonable idea, but it does run the risk of affecting E-House’s sales agents if it isn’t done right. Plenty of companies have screwed up the dual offline/online sales strategy in the past.

The article notes that real estate advertising is Sina’s second highest source of revenue. E-House’s connections in the property business must have been an added motivation.

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