A Zillow Inc. (Z) purchase of Trulia Inc. (TRLA) would create a dominant search website for U.S. house hunters, reshaping an online industry the companies helped popularize. Zillow, the largest U.S. real estate website, is seeking to buy No. 2 Trulia for as much as $2 billion in cash and stock, according to people with knowledge of the matter. 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 are ongoing and may not lead to a deal.
The companies help buyers and renters find information on homes, generating revenue by selling advertising and charging Realtors to place their listings prominently. Together Zillow and Trulia had more than 85 million unique visitors in June, accounting for about 89 percent of all traffic to the 15 most-visited real estate sites tracked by ComScore. A combination would make it hard for rivals to compete, said Steve Murray, president of Real Trends Inc. in Castle Rock, Colorado.
“It’s a blockbuster,” said Murray, whose company provides research and consulting for the real estate industry. “What this says is, Zillow has been and has locked up the absolute dominant position in online real estate in the United States.”
Seattle-based Zillow rose more than 15 percent to $145.76 a share yesterday, giving it a market value of $5.8 billion. Trulia, based in San Francisco, surged 32 percent to $53.74 a share, giving it a market value of $2 billion. Zillow may pay about two-thirds of the purchase price with its own stock, one of the people familiar with the matter said.
Zillow’s goal has long been to consolidate the industry, according to Stefan Swanepoel, a consultant and author on real estate trends.
Source: http://www.bloomberg.com/news/2014-07-24/zillow-said-to-be-seeking-to-buy-rival-real-estate-site-trulia.html