Over the past few weeks, a variety of tier-1 VCs have issued grim warnings to their portfolio companies. For example, Benchmark Capital's Bill Gurley has an extensive memo, which says that it will be critical for entrepreneurs to hunker down.

Well, it looks like companies are taking note. Just look at Zillow.com (for which Benchmark is a backer). The company announced that it is letting go of 25% of its workforce (or 40 employees).

No doubt, Zillow is an innovator and has a great team. Essentially, the website makes it easy to get a value of your house. But of course, the real estate market remains lackluster. More importantly, the capital markets are still in a deep freeze.

With already $87 million raised, Zillow believes it's a good idea to keep its powder dry. Besides, the site is still clocking strong gains in traffic.

So far, online real estate site Zillow has raised a total of $87 million. And the latest round came this week: Legg Mason led a financing round for $30 million. Other investors included Benchmark Capital and TCV.

In light of the subprime meltdown and falling housing prices, these investors certainly have lots of guts. Then again, venture capitalists look for mega returns – and this usually means being patient.

As the competition gets squeezed, Zillow will have the resources to expand its offerings as well as improve its brand.

And Zillow's site is getting lots of action. Last month, there were about 4.4 million unique visitors. Although, there is no indication about the revenue levels from Zillow.

Zillow has a massive database that helps provide a rough value of your home (called a Zestimate). But with the weakness in housing prices, it seems like it could be a depressing experience.

If you want to check out other venture capital fundings, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Things are looking bleak for the real estate industry. For example, Toll Brothers (NYSE: TOL) saw a drop in its third-quarter profits and lowered its full-year guidance.

As with any speculative market, the good times don't last forever. In fact, according to a survey by the National Association of Home Builders, confidence for builders is at levels not seen since the early 1990s (yes, that was a time when there was another plunge in real estate, focused in places like southern California).

Then again, there is certainly good news: it's getting much easier to buy a quality house.

The real estate industry still has some problems – such as its commission structure.

But there is more good news: a growing number of web sites are providing much more information to home buyers and sellers. A recent example is Zillow, which I wrote about in Bloggingstocks.com. The company struck a deal with Yahoo! Other portals are also gunning for the real estate market, such as Google and MSN.

Another player is Reply.com. Last week, I met with the company's CEO, Payam Zamani.

Like Zillow, you can get a valuation on most homes in the US. But there are some other cool features. There is a kind of MySpace quality to it; that is, Reply.com allows users to make comments and post ratings on houses. Over time, this should be a valuable database.

But the most interesting feature is Unsolicited Offer, which should help put pressure on real estate commissions. Let's say that you find a house you want to buy – based on your search – you can make an offer directly to the homeowner.

With the Internet, many industries have experienced lower commissions and fees – as has been the case with stock brokers and travel agents. As for real estate, the industry has been quite savvy at keeping the status quo. But, it's only a matter of time before these commissions crumble too.

Tom Taulli is the author of a variety of books, such as the Complete M&A Handbook and operates InvestorOffering.com.

I recently wrote a BloggingStocks post about Yahoo's recent deal with Zillow, an online real estate company. My take was that the deal was a sign that Yahoo is getting serious about mining its huge amount of data. The data, in fact, is getting much more interesting with such new social networking properties as Flickr, Del.icio.us and so on.

Well, this week, Yahoo hired Dr. Raghu Ramakrishnan, who will become a vice president and Yahoo research fellow. He is certainly a brain, having worked as a computer science professor at the University of Wisconsin and co-founded the Data Mining Institute. There is also a scholarly paper trail, with over 150 technical papers, as well as a definitive book on data mining, Database Management Systems.

Although, he does venture into the real world. In the late 1990s, for example, he co-founded a collaborative software company, called QUIQ.

You can get more detail on him at his web site.

Basically, his mandate will be to push "social search." Think of this as leveraging the "wisdom of crowds."

That is, as user-generated-content grows – with things like videos, blogging and even Yahoo Answers – search is ready for major change. True, Google's PageRank is solid, but it will probably not be the method for the long haul.

So, while Microsoft and Yahoo greatly lag Google in the search game, there is still hope. And, it probably lies in academics who are pioneering data mining.

A few weeks ago, I talked to the CEO of an upstart company, Farecast.com. Basically, over the past three years, they have analyzed over 90 billion price points in the airline industry.

So, on the web site, you can see a prediction on whether an airfare will increase or decrease over the next seven days.

I asked the CEO what types of employees the company has. Answer: data miners, statisticians, economists and so on (yes, lots and lots of brainpower).

Basically, with the growth of the Internet, there has been a corresponding explosion of data. Now, some entrepreneurs are developing companies that leverages this data.

Another example is: Zillow. It's a real estate site that cranks through huge amounts of data to allow people to appraise the value of a home (called a zestimate).

Interestingly enough, the name of the company is a play on words; that is, Zillow's software looks at zillions of data points. For example, the Zillow database has price estimates on about 67 million homes.