Zillow to Acquire Trulia; both Companies to Maintain Course

Zillow, the Seattle based company which started out inrnthe mid-2000s as a website where one could check on one’s own and one’srnneighbor’s property values and has grown to a large on-line source ofrninformation on homes for sale is acquiring another housing boom start-up,rnTrulia.  The purchase, which actuallyrnappears to be more of a merger, was confirmed on Monday and will give $3.5rnbillion in Zillow stock to the company’s stockholders.  The boards of directors of both companiesrnhave approved the transaction which is expected to close next year. </p

The two companies are self-described as primarilyrnmedia companies which generate the majority of their revenue throughrnadvertising sales to real estate professionals. rnA corporate press release said that despite continued growth as publicrncompanies, “significantrnopportunities of scale remain as the majority of advertising dollars in thernreal estate sector have yet to migrate online or to mobile. For example, therntwo companies’ combined revenue currently represents less than 4 percent of thernestimated $12 billion real estate professionals spend on marketing theirrnservices to consumers each year. </p

Therncombined company will maintain the consumer brands of both entities and says itrnwill continue to offer its real estate information free to buyers, sellers, andrnrenters.  Zillow CEO Spencer Rascoffrnsaid, “Consumers love using Zillowrnand Trulia to find vital information about homes and connect with the bestrnlocal real estate professionals,  Bothrncompanies have been enormously successful in creating compelling consumerrnbrands and deep industry partnerships, but it’s still early days in the worldrnof real estate advertising on mobile and Web. This is a tremendous opportunityrnto combine our resources and achieve even more impressive innovation that willrnbenefit consumers and the real estate industry.” </p

In June, Zillow reported a record 83rnmillion unique users across mobile and Web and Trulia a record 54 millionrnmonthly unique users across its sites and mobile apps.   Therntwo brands have limited consumer overlap – approximately half of Trulia.com’srnmonthly visitors do not visit Zillow.com, and approximately two-thirds ofrnZillow.com’s monthly visitors across all devices do not use Trulia. Maintainingrnthe two distinct consumer brands will allow the combined company to continue tornoffer differentiated products and user experiences, attract more users andrnmaximize the distribution of free content across multiple platforms, apps andrnchannels.'</p

The acquisition agreement providesrnfor Trulia shareholders to receive 0.444 shares of Class A Common Stock ofrnZillow for each share of Trulia, and will own approximately 33% of the combinedrncompany at closing.  Current Zillow holders of Class A Common Stock andrnClass B Common Stock will receive one comparable share of the combined companyrnat closing, and will represent approximately 67% ownership of the combinedrncompany. Trulia CEO Pete Flint will remain as CEO of Trulia reporting to Rascoff,rnand will join the new company’s Board of Directors.  Trulia is currently based in San Francisco.</p

According to the press release the merger of the tworncompanies is expected to provide them with accelerated innovation on mobile andrnweb platforms, greater access to free real estate market data, the ability tornbetter provide this data to consumers and real estate professionals, broaderrndistribution for users, enhanced value and return on investment forrnadvertisers, and corporate cost savings.

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