Zillow Looking to Purchase Rival Trulia

Zillow Looking to Purchase Rival Trulia

It has been rumored that Zillow may be acquiring Trulia sometime this week. Zillow is the largest United States real estate website and Trulia is number two.

Because of these rumors, Zillow (Z) stock opened at $127.68 and closed at $145.76 on Thursday July 24th. Friday, July 25th, the Zillow stock closed at $158.86. Trulia (TRLA) opened at $40.87 and closed at $53.74 on Thursday July 24th. Friday, July 25th, the Trulia stock closed at $56.35. After these spikes in trading, Zillow’s market value is now over $5.8 billion and Trulia’s market value is now over $2 billion.

Zillow has purchased other real estate websites in the past like Streeteasy.com for $50 million in 2013 and Hotpads Inc. for $16 million in 2012. Rumor has it that Zillow may be purchasing Trulia for approximately $2 billion in cash and stock.

Competition

Sean Aggarwal, the chief financial officer for Trulia, said in June that he saw the real estate niche a two-player market, evolving much like e-commerce. He was referencing how Amazon and Ebay dominate e-commerce.

If Zillow does buy Trulia, Move Inc. is really the only major competition out there right now. Move Inc is the parent company of Realtor.com and is worth approximately $579 million. Redfin is also a competitor but is not considered a major player.
It is likely that more consolidation will take place for the online real estate arena because most agents only pay for advertising subscriptions on one or two websites.

Ponder This

If Zillow does purchase Trulia, will they rename the company Zillia or Trullow? Probably neither but it would nice if Zillow was a little more accurate on their property valuations.

Zillow and Trulia are notorious for giving inaccurate home values and will never take the place of a Realtor or real estate appraiser. There are just far too many factors that contribute to a property’s value. For example, Zillow cannot take scenic views into its calculation (a view of the ocean or overlooking a valley can affect a property’s value by hundreds of thousands of dollars). That is why it is wise to only use Zillow or Trulia as a very rough estimate for your houses value.