Boston, MA 07/25/2014 (wallstreetpr) – Zillow Inc (NASDAQ:Z) wants to make it tough for real-estate online search businesses in the U.S. as the industry leader intends to tie the knot with the second best market player, Trulia Inc (NYSE:TRLA). Though Bloomberg reported that negotiations are underway, but cited anonymous sources stating that the tentative acquisition value could go up to $2 billion, paid in cash and stock. Elaborate details are expected to be announced by the next week.
Both the companies help real estate buyers and renters to locate information related to homes, and the two of them source revenues from selling, advertising and billing Realtors for their listings on the websites. As per the latest data published by ComScore, both Zillow Inc (NASDAQ:Z) and Trulia Inc (NYSE:TRLA) attracted over 85 million unique visitors to their sites in June, which implies 89% of the total traffic across 15 most-visited real estate sites. Thus, it is comprehensible as how the industry will look like when these two dominant players will combine.
Following the report of the acquisition, shares of Zillow climbed 15% to $145.76, while Trulia’s shares rallied by as much as 32% to $53.74 on the day. Zillow has grown seven times since its debut three years back while Trulia has tripled over the last two years. The deal of the two companies could be a harsh blow to rivals like Move, Inc and Redfin Corp., who share limited space in the industry. Sources claim that Zillow could offer its stock for two-third price of the deal, but more information is awaited. The representatives of both the companies have turned down the requests to specify further.
According to Stefan Swanepoel, who follows real estate trends and is an author, Zillow Inc (NASDAQ:Z) has long been eyeing to rule in the residential real estate and to become the sole leader in facilitating consumer convenience and one-stop home shopping information. In the meanwhile, the bounce back in home prices and an imminent recovery has helped the growth of the two companies. Trulia’s CFO Sean Aggarwal looks at the real estate online business as a two-player market, comparing it with the likes of EBay Inc (NASDAQ:EBAY) and Amazon.com Inc. (NASDAQ:AMZN) In Sean’s opinion, the online real estate attracts $28 billion a year in revenues, which in itself is an incredible opportunity in years to come.
