The Federal Trade Commission is reportedly looking at the proposed $2.9 billion acquisition of Trulia (TRLA) by Zillow (Z) under the anti-trust microscope, according to The Wall Street Journal, and it could come down to an issue of how the FTC distinguishes between online and offline advertising.

At issue is how much of real estate advertising the firm actually controls or could control, and whether online and offline advertising are separate.

On Tuesday, HousingWire cited a report from PAA Research, questioning the strength of Zillow’s position and whether its advertising inventory problems are growing.

Currently, the firm only captures a fraction of the advertising marketplace for real estate agents. The two companies’ combined revenue currently represents less than 4% of the estimated $12 billion real estate professionals spend on marketing their services to consumers each year.

Separately, on Monday, the Wall Street Journal raised reported questions from the FTC about whether a Zillow-Trulia combination could have an anti-competitive impact in trying to grow its advertizing revenue. The FTC, the article states, made a recent "second request" for more information on the proposed merger.

"Whether the Zillow-Trulia deal prompts concerns at the commission could hinge on whether the agency views all real-estate advertising equally or instead distinguishes between online ads and those outside cyberspace.

In the past few years, Zillow and Trulia have become dominant online portals for real-estate information, including home-sale listings, and they have become by far the most visited real-estate websites. Their primary source of income is real-estate agents, who pay to advertise their contact information next to home listings in user searches. Trulia also sells software to agents.

Some real-estate agents express concern that a combined Zillow-Trulia could have such a dominant online presence it could raise prices to advertise on the sites."

Contrarian investor Andrew Left, head of The Citron Report, made a presentation Tuesday that made similar points at the Value in Investing Congress in New York.

Left, a short-seller, has been a longtime critic of Zillow, as noted in other business trade media.