Zillow to Acquire Trulia in $3.5 Billion Deal

Two major players in the online real estate listings market are joining forces to expand their reach through a real estate mega merger.

Zillow, Inc. (NASDAQ: Z) has announced an agreement to acquire Trulia, Inc. (NYSE: TRLA) for $3.5 billion in a stock-for-stock transaction expected to close in 2015.

Last month, Zillow reported 83 million users across both web and mobile Internet use, while Trulia reported 54 million – a combined 61 percent of total Internet users for the category, according to comScore.

The combination of two of the most prominent online housing hubs will offer more online real estate tools and services to consumers, driving more business for real estate professionals, Zillow said in announcing the deal.

The combined company will continue to offer home and real estate information for free, and provide advertising and software tools for real estate agents.

During a conference call on the deal, Zillow CEO Spencer Rascoff said the real ad potential for the two companies is working to move real estate marketing from offline to online, according to reports, which note that despite increased revenue results for fiscal year 2013, neither company has been hugely profitable.

“Better agents make for better advertisers,” Rascoff said, adding agents still spend on mailers and billboards, but the mobile revolution will likely drive them to either Zillow, Trulia or both.

At closing, Trulia CEO Pete Flint will remain as CEO of Trulia reporting to Zillow CEO Rascoff, and will join the board of directors of the combined company. In addition, at closing, a second member of Trulia’s board of directors will join the board of the combined company. The two companies will remain separated to allow for differentiated products and user experiences.

“Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it’s still early days in the world of real estate advertising on mobile and web,” Rascoff said in a news release. “This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry.”

The online real estate search engines have a shared mission, Flint says. Both Zillow and Trulia generate the majority of their revenue through advertising sales to real estate professionals, which will continue to be a main area of focus, according to reports.

“By working together, we will be able to create even more value for home buyers, sellers, and renters, as well as create a robust marketing platform that will help our industry partners connect with potential clients and grow their businesses even more efficiently,” Flint said.

Further operational and organizational details will be announced upon the deal closing, Zillow said.

Written by Cassandra Dowell

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