Zillow to Acquire Chief Competitor Trulia in $3.5 Billion Deal

Following a six-week courtship, two mega real-estate listings websites are joining forces to create a colossal database of digital listings.

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By Geoff Weiss

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This morning, digital real-estate company Zillow announced that it will acquire one of its largest competitors, Trulia, for $3.5 billion in stock. (Zillow will pay 0.44 of one of its shares for every share in Trulia.)

Both media brands -- which generate the majority of profits by charging brokers to advertise their services next to millions of home listings -- will continue to exist, according to the deal.

Upon finalization in 2015, Trulia CEO Pete Flint will maintain his role and join Zillow's board, reporting to Zillow CEO Spencer Rascoff.

Though Zillow reported a record 83 million unique visitors in June -- when Trulia had 54 million users -- there is still a relatively narrow overlap, with only approximately half of Trulia's users also visiting Zillow, Rascoff told The New York Times.

Related: Zillow Buys Rival StreetEasy to Corner the New York Market

The two companies boast similar listings, but they also have distinct features.

While Zillow's "Zestimate" feature appeals to existing homeowners curious to know the worth of certain properties, for instance, Trulia also vends technology that helps home sellers seal the deal, according to the Times.

In merging, the companies also expect to amass at least $100 million in cost savings by 2016.

Related: How This Tech Startup Is Renovating the $12 Trillion Commercial Real-Estate Industry

While the deal could be a win for consumers by creating more tools, features and listings, it has raised eyebrows in the broker community. Zillow and Trulia have both stated in the past that they do not intend to become real-estate brokerages, reports The Wall Street Journal, but some brokers fear that the companies might eventually "expand by having their own real-estate agents" and that the dominant entity might eventually raise its advertising fees.

Rascoff understands that antitrust regulators may question the merger but insists the companies' combined revenues of $341.2 billion "represents less than four percent of the estimated $12 billion real estate professionals spend on marketing their services to consumers each year," he told the Times.

Related: This Hard Rock Hotel Just Raised $1.5 Million Through Crowdfunding

Geoff Weiss

Former Staff Writer

Geoff Weiss is a former staff writer at Entrepreneur.com.

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