Zillow grabs Trulia for $3.5 billion in stock. How will it affect home search, prices?


Zillow and Trulia will be joining forces to build what could be a new real estate giant. Zillow is buying Trulia for $3.5 billion in stock in a deal that is expected to be finalized next year 2015.

The two popular real estate websites have been the go-to destinations of those looking for new properties. They've been the leaders in the online real estate listing business with about 137 million unique visitors combined only last June.

The websites have been competitors but their partnership will make them even more powerful, leaving behind Move Inc. The latter is an affiliate of the National Association of Realtors in the United States and the two's biggest competitor.

Zillow and Trulia home listings across the U.S. Websites are searchable and offer important information a real estate and property hunter needs. The online home listings have changed the way people shop for their dream homes. Instead of looking for a direct broker or real estate agent, people now tend to go online first and check the home listings.

The two websites earn from ads by real estate agents. A lot of brokers get noticed and are contacted, thanks to the likes of Trulia, Zillow, and other similar websites.

Spencer Rascoff, Zillow Chief Executive, believes that the deal will grow the business even more. Combined, the companies' revenue accounts to only four percent of the whole real estate advertising business. The average annual revenue of advertising in real estate is a staggering $12 billion.

"It's still early days in the world of real estate advertising on mobile and Web. This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry," Rascoff said.

With the two partnering in many ways, they will be able to save money on marketing, as well as have a bigger influence within the real estate industry.

For nine years, Zillow and Trulia have been rival companies so this development comes as a surprise. Their boards of directors have approved the deal already so there shouldn't be a problem.

Zillow first made to move to acquire Trulia. It took Trulia about six weeks to agree to the deal. Zillow will be paying 0.444 of one of its shares for every Trulia share.

Zillow has more unique monthly visitors at 83 million compared to the 54 million Trulia has. With this deal, the real estate online listing sector is in for a big change.

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