Zillow, Inc. announced that it has entered into a definitive agreement to acquire Trulia, Inc. for $3.5 billion in a stock-for-stock transaction. The Boards of Directors of both companies have approved the transaction, which is expected to close in 2015. The combined company will maintain both the Zillow and Trulia consumer brands, offering buyers, sellers, homeowners, and renters access to vital information about homes and real estate for free, and providing advertising and software solutions that help real estate professionals.
Trulia CEO Pete Flint will remain as CEO of Trulia reporting to Zillow CEO, Spencer Rascoff, and will join the Board of Directors of the combined company. In addition, at closing, a second member of Trulia's Board of Directors will join the board of the combined company.
Both Zillow and Trulia are primarily media companies, generating the majority of revenue through advertising sales to real estate professionals. Despite continued growth as public companies, significant opportunities of scale remain as the majority of advertising dollars in the real estate sector have yet to migrate online or to mobile. For example, the two companies' combined revenue currently represents less than 4% of the estimated $12 billion real estate professionals spend on marketing each year.
In June, Zillow reported a record 83 million unique users across mobile and web. For the same month, Trulia reported 54 million monthly unique users across its sites and mobile apps]. The two brands have limited consumer overlap - approximately half of Trulia.com's monthly visitors do not visit Zillow.com, and approximately two-thirds of Zillow.com's monthly visitors across all devices do not use Trulia.com. Maintaining the two distinct consumer brands will allow the combined company to offer differentiated products and user experiences, attract more users and maximize the distribution of free content across multiple platforms, apps, and channels.