Zillow.com has formed a strategic partnership with Yahoo Real Estate, combining advertising efforts between the second and third largest online real estate companies in the U.S. As part of the deal, Zillow will sell advertising on Yahoo Real Estate and supply its four million for-sale listings as well as its Zestimates to Yahoo. The companies said that the deal creates "one of the most powerful and far-reaching real estate ad networks on the Web."

"Once the integration of listings from Zillow is complete this fall, all for-sale listings on Yahoo! Real Estate will be provided by Zillow, which will give agents and brokers significantly more exposure for their listings and their advertisements," wrote Zillow.com Chief Operating Officer Spencer Rascoff in a blog post.

The listings placed on Zillow by real estate agents will automatically appear on Yahoo, reducing the number of data feeds that real estate companies need to manage. Meanwhile, those agents who buy "showcase ads" or "featured listings" will automatically have those placed both on Yahoo Real Estate and Zillow. The companies also pledged to work together on display advertising across the two sites.

Zillow and Yahoo have a long history together, so it's not a surprise to see them strengthening the partnership. But one has to wonder if this is setting up a potentially bigger deal (possibly an acquisition of Zillow or a carve out of Yahoo Real Estate) in the future. At this point, Rich Barton and the rest of the crew at Zillow have maintained their independence as a heavily-funded venture-backed startup. But given the amount of money it has raised to date -- $87 million from Benchmark and others -- Zillow needs to swing for the fences.

The partnership appears to have some benefits for real estate professionals. Agents and brokers will now be able to coordinate their advertising buys across the two Web sites, an idea that was welcomed by at least one Seattle online real estate professional.

Findwell CEO Kevin Lisota said that his company already showcases property listings on both sites, and because of that the Zillow-Yahoo partnership won't increase the reach of his company's listings per se.

"However, by adding Zillow map navigation and property data to Yahoo, it should vastly improve the current Yahoo site," said Lisota. "In addition, Zillow is making a strong effort to increase conversion from web visitors to paying customers for real estate agents. Having some of their new “contact an agent” features on Yahoo will certainly improve the number of contacts we receive from our advertising, as we’ve never received any contacts from Yahoo listings, despite their huge traffic numbers."

Zillow.com is the second largest online real estate company behind Realtor.com, while Yahoo ranks third in terms of traffic, according to Hitwise's May report.

Inman News reports on the partnership in great detail, with Rascoff telling the real estate news site that there's only about a 10 percent overlap in traffic between Zillow and Yahoo Real Estate. Because of that, the companies believe that their ad partnership will have greater reach than that of top online real estate company Realtor.com.