Zillow and Trulia, competing real estate listing sites, are now joining forces. Zillow announced a deal on Monday morning to purchase Trulia for $3.5 billion in stock.
The deal took only six weeks to set up. Zillow will pay 0.444 of their own shares for each share of Trulia, which puts the value of the deal at $70.53 per Trulia share. As of Friday's closing prices, the New York Times reports this is a premium payment of about 25 percent.
Currently, Zillow has 83 million users, and Trulia has 54 million. Together, they will be able to dominate the online real estate listing industry, through both their web and mobile platforms. Spencer Rascoff, CEO at Zillow, told The New York Times, "The companies know each other very well. We’ve been competitors and rivals for nine years, but I’ve always had respect for them."
Rascoff also offered some insight into the end goal of this deal. Zillow is aiming to create a portfolio similar to that of InterActiveCorp (which owns several major dating websites), but for the real estate industry. Last year, Zillow purchased StreetEasy and HotPads, and Trulia owns Market Leader.
Currently, Zillow is set up for ideal usage by existing homeowners, whereas Trulia brings in a number of potential sellers. Because of this, users of the two sites do not overlap very much. The merger will allow the selling and buying process to be more streamlined. Until the deal closes next year, Zillow and Trulia will continue to compete.