Zillow has reportedly made a $3.5 billion bid to purchase Trulia, its chief rival. Zillow first launched in the 2004 and went public in 2011 while Trulia went public in 2012. The deal is expected to create a company that is the largest provider of online real estate listings, and estimates suggest that Zillow will be able to attract mobile users who are becoming the fastest growing segment of Internet users.
Both companies generate revenue by selling advertising and by selling subscription services to real estate agents. While both Zillow and Trulia offer similar information to visitors, neither company is worried about customer overlap as nearly half of Trulia users do not visit Zillow. Zillow is best known for its Zestimate, which is an estimate of how much a home may be worth based on a variety of statistics. However, users are cautioned to use that number only as a starting point when shopping for a home.
It is estimated that Zillow will save $100 million in costs after the acquisition is complete, and reports say that both the Zillow and Trulia brand will be used in the future. Trulia's CEO is expected to remain in his position and will become a member of the new company's board. Although the sale has been approved by the boards of both companies, it has not been completed. The action is waiting for official approval from the shareholders.
Business transactions should be made with the best interest of the owners and shareholders of a company in mind. A business law attorney may be able to help a company make a deal to acquire or be acquired by another company in a way that profits both parties.
Source: ABC News, " Home> Technology Zillow Buying Trulia to Build Real Estate Titan", Mae Anderson, July 28, 2014