The two biggest companies in online house searching have decided to join each other upon the announcement yesterday of Zilliow buying Trulia for 3.5 billion dollars. Both companies are two of the highest visited web and mobile sites which together have attracted more than 130 million visitors per month providing customers with detailed listings. The real estate portals have virtually transformed the landscape of the housing market over the last decade, so a merger between them will have industry historic results.
The Gravity of Zillow and Trulia![zillow 1]()
The combined revenue of the websites have only added up to about 4 percent, or 30 million dollars of the 12 billion dollars the industry spend on advertising. Some real estate agencies can pay up to 20,000 dollars just to display a listing on either of the two or both. Zillow has become the main media for much of the home buying generation as mobile applications have soared in popularity in recent years. Both sites have been able to simplify the searching process making the buying process easier to understand. In many instances the websites have allowed potential customers to gain full access to the properties that are being held in interest with up to date information that is only a click away, whereas in previous years where information was held in the hands of only the real estate brokers. For instance, Trulia offers ratings on the public transit, the schools, and the crime rates around the properties in question. Zillow has created its own algorithm for deducing home value for the website so that customers can have an idea of property value compared to national and regional comparisons. Zillow CEO Spencer Rascoff has said that “Mobile is becoming the medium choice for home shopping.” which has been proven with the increase of purchases being lifted via venues such as Amazon and eBay in recent years.
Fear in the Industry
The current fear that has been plaguing the real estate industry has been the fear that Zillow, Trulia, or like companies might be the root cause to making real estate brokers obsolete. While Zillow does have some real competition with other sites like Homes.com, Realtor.com, and real estate brokers such as ReMax, Century 21, Coldwell Banker, and other such real estate brokers. However many look at the merger between Zillow and Trulia as the best way to leverage brokers so that customers can get the best deals as possible. Many industry experts believe that the combination of the companies would just give the finalized company the ability to charge real estate brokers more money when it comes to listing their properties on the two web sites. The plan right now is to have both websites to run at the same time allowing for diversity within the range of customer traffic, yet be able to charge more than what the agencies are already paying the two companies.
The Deal![zillow 2]()
So now the two biggest names in the online housing markets are merging to create one technologically superior company. Zillow is purchasing Trulia in a stock deal that is currently values at 3.5 billion dollars. Shares of Trulia jumped yesterday by 12 percent just at the announcement of the merger. Combined the two companies account for roughly 48 percent of the online listings for web traffic in the real estate industry. Both company’s stocks have continued to rise within hours of announcing the merger. Essentially now the Zillow-Trulia game has become the only game in town as the websites have more than three times the customer traffic as their biggest competitor at Realtor.com. One of the biggest concerns that have plagued both companies is the legitimacy of the up to date accuracy of their listings. Both companies have gloated for years that they have the most up to date information on all of their listings but have failed in the past to deliver on that promise. Sometimes the information can be a hit or miss. The deal itself has already been called into question by many industry analysts wondering who will make out the best when this deal is finalized because after all it may only be the companies themselves and their investors. Customers often get caught up in the crossfire of big mergers like this one because with the lack of competition also comes the lack of the companies caring so much about the customers and more about their bottom lines.
Spokesman for Zillow had stated that the company was not looking to replace the real estate brokerages nor has the company the desire to become one themselves. The company has only the goal to become the leader in its category of producing great leads to brokerages and allow for customers to be on the cutting edge of technology in order to educated and ease up the process of buying property. As far as the merger goes, shares of both companies have continued to rise and the outlook for the merger will be financially successful for all those involved.
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