Zillow Inc. Said To Pursue Trulia Inc. Buyout, Shares Skyrocket

| About: Zillow Group, (Z)

By Michelle Jones

Shares of Zillow Inc. shot up by more than 19%, while Trulia Inc. stock skyrocketed by more than 38%.

Zillow Inc. (NASDAQ:Z) is apparently trying to buy competitor Trulia Inc. (NYSE:TRLA), a move that would combine the two most popular real estate websites in the U.S. Bloomberg cites unnamed sources who are familiar with the company’s plans.

Zillow could pay $2 billion for Trulia

According to those sources, Zillow might pay up to $2 billion to buy Trulia, and the companies might announce a deal by next week. However, the talks are not yet complete, and the sources said they may not result in a deal.

Both companies focus on helping renters and buyers find homes. They generate revenue by selling advertising and getting retailers to pay for their listings to be prominently listed on the site. Together, the two companies had over 85 million unique visitors last month. ComScore data said that made up approximately 89% of all the traffic to all real estate sites during the month.

Zillow, Trulia rebound

Shares of both Zillow and Trulia have rallied tremendously over the last couple of years. Trulia stock more than doubled, while shares of Zillow more than quadrupled since the beginning of 2013. Both companies are benefiting from the improving U.S. housing market.

Home prices climbed by 26% since they hit their low point in March 2012, according to the S&P/Case-Shiller Index, which covers 20 cities. In June, sales of existing homes rose to the highest level in eight months while the number of listings increased, according to the National Association of Realtors.

Trulia, Zillow see rapidly rising revenue

Trulia is expected to see a 76% increase in its revenue this year, which would bring it up to around $253 million. In the previous year, the company’s revenue more than doubled, according to Bloomberg estimates. Just last month, Trulia CEO Pete Flint said they would be slashing some jobs and taking a charge related to those job cuts in the second quarter.

Zillow is also expected to post major gains, with its revenue climbing to approximately $311 million this year. That would be a 58% year over year increase. The company partnered with Yahoo Homes and had 53.8 million unique visitors last month. That’s significantly higher than Trulia’s 31.6 million unique visitors.

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