Zillow Inc. is seeking to acquire rival Trulia Inc., people with knowledge of the matter said, in a move to combine the two most-visited U.S. real estate websites. Shares of both companies jumped.
Zillow could value Trulia at as much as $2 billion in a purchase, and an agreement may be announced as soon as next week, said one of the people, who asked not to be identified because the information is private. Talks between the companies are ongoing and may not lead to a deal.
Zillow rose more than 16 percent to $146.78 a share, giving it a market value of about $5.8 billion as of 2:06 p.m. in New York. Trulia surged 23 percent to $49.91 a share, giving it a market value of $1.8 billion.
The companies help buyers and renters find information on homes, generating revenue by charging realtors to give their listings prominence and by selling advertising. Together Zillow and Trulia had more than 85 million unique visitors in June, accounting for about 89 percent of all traffic to real estate sites, according to data from ComScore.
Katie Curnutte, a spokeswoman for Zillow, declined to comment. Matt Flegal, a spokesman for Trulia, said the company doesn’t comment on speculation.
What this means: Wall Street would LOVE nothing better than to have a huge consolidated PUBLIC real estate site for consumers. Can you imagine the ad potential? (Realtors buy online leads from Zillow and also pay to advertise against their own listings.) I also read somewhere recently, will try to find the source, that Wall Street thinks Zillow, Trulia and the other portals are sucking only a fragment of the $28 billion ad potential they could be. (Where will it come from? Print!) Such a merger would create not just an on-line giant but a mega-media behemoth! Zillow and Trulia sell House Porn as entertainment, and it works! I was at Inman last week in San Francisco and am currently trying to write up all the take-aways, one of which includes Brad Inman’s interview with Zillow Chief Revenue Officer Greg Schwartz.
Zillow already has millions of viewers, like 54 million something uniques per month. A Trulia-Zillow merge could create a monster that could hog 89% or more of online listings
As Trey Garrison is reporting at Housingwire:
Together, Trulia and Zillow’s 84.6 million unique visitors in May 2014 account for twice the number of unique visitors as the next three real estate websites put together, according to the Beyond Syndication 2014 report from Clareity Consulting.
This is all fresh and just happening, so let me go do some digging and get back to you. Shall agents panic? No. I think this is more of a Wall Street deal, and I am dialing my son right now to see why he didn’t buy me Zillow stock when I asked him to. Here’s the meat and potatoes from Bloomberg:
Online real estate as a “very large category,” with real estate professionals spending about $28 billion a year on marketing. Trulia and Zillow collectively are doing about $500 million to $600 million a year in revenue, he said, leaving $27 billion plus of “potential money” that could come into that realm over the next several years.
See, that’s what investors want.
“Long-term, we see this as a two-player market and evolving much like e-commerce” with EBay Inc. and Amazon.com Inc., Sean Aggarwal, chief financial officer at Trulia, said at the Bank of America Merrill Lynch Global Technology Conference in June.
In other words, buying homes on line!
This could leave Move.com i.e. Realtor.com in the dust. And agents? Get with the program. Remember, Zillow is still basically entertainment — their information is not all that accurate, and most of those unique visitors are voyeaurs who could no more afford a multi-million dollar beach house in Malibu than I can.
But then again, money can buy a whole lot… stay tuned.
