Just a few weeks ago, Zillow announced via Bloomberg News that it was purchasing real estate rival Trulia for $3.5 billion in cash and stock. The ripples of that announcement made their way through Wall Street rocketing the stocks of both companies upward. This monster move could very well set Zillow up to be the undisputed king of the residential real estate media industry.
Funneling eyeballs toward real estate is a talent both companies specialized in through their multiple media channels. No matter the future of real estate, both companies were setup to fight each other for years to come, and that’s why this acquisition was so surprising. It’s like Apple buying Google, no one would see it coming and its action today would send ripple effects through the tech and Internet for decades to come.
Some aren’t happy about the acquisition and, in fact, are a little fearful about the future. With Trulia controlled by Zillow, the company in essence could operate like a monopoly on real estate information. With less information available to consumers, bad real estate moves are more likely, and that could hurt your wallet in the long run.
For years both companies have been spending millions to strengthen their consumer awareness. People know these names and there is rumor that another big name merger could happen. Trulia before getting bought out by Zillow was in the process of purchasing the big No. 3 player in the real estate media market – realtor.com.
One major roadblock to the deal, though, is simply its size. These are two major companies with similar products. There is going to be major overlap across departments, and integration isn’t going to be easy. Trulia will probably feel like it’s getting a band-aid ripped off every inch of its body. Plus, both companies have been rivals for years and might have some hurt feelings that might act as a speed bump to integration, but big money has a way of healing business wounds.
Both Zillow and Trulia offer free listings while making money through advertising. Just how much do they make through advertising depends on their unique users. Back in June, Zillow announced that its unique user base crossed the 83 million mark, while Trulia passed the 54 million point.
Zillow thinks this acquisition will allow for faster innovation in the mobile real estate arena, while their combined data could provide new insights to both consumers and advertisers. Perhaps their combined efforts could help consumers in the long-run, but we’re left thinking that competition has a way of driving innovation. If Zillow and Trulia are relaxed and don’t feel the pressure to one-up each other, consumers might be left with a product that is years behind innovation.
Let us know how you feel about Zillow Buying Out Trulia in the comments below, or better yet in our survey.