Zillow is pushing forward with its planned $3.5 billion acquisition of rival Trulia, but before the deal is consummated the Seattle online real estate company must convince its partners, customers and regulators that it is a good idea.
Today, the company took a step in that direction sending a letter to real estate partners, explaining why the blockbuster acquisition will benefit the industry.
Zillow vice president Curt Beardsley writes that the deal will lead to more innovation, improve listing infrastructure and empower consumers with more information. “We believe this is a tremendous opportunity to combine resources for innovation,” he writes.
Over the years, many in the real estate industry have cast a wary eye towards Zillow, something that continues to nag at the company despite repeated comments by CEO Spencer Rascoff that it does not intend to get directly involved in the real estate transaction. (Previously on GeekWire: Zillow buying Trulia: An industry perspective)
In an appearance on CNN earlier this month, Rascoff noted that a combined Zillow and Trulia would control just four percent of the overall real estate marketing spend in the U.S.
“Most advertising still occurs offline, it hasn’t migrated to the internet yet,” he said.
Shares of Zillow were up more than three percent today, giving the company a market value of $5.5 billion. The stock is up 70 percent so far this year. Trulia shares also rose, with the San Francisco-based real estate company now valued at $2.1 billion.
Here’s the full note:
Why Zillow and Trulia joining forces will benefit you
As you’ve probably heard by now, Zillow recently entered into a definitive agreement to acquire Trulia. The deal is not final and won’t be for some time, requiring both shareholder and regulatory approval in addition to customary closing conditions.
Still, the industry partners I’ve spoken with since the announcement have a lot of questions as to what to expect from this acquisition. While I can’t answer all of them yet, I can say that we believe this is a tremendous opportunity to combine resources for innovation. Here are just a few things to look forward to:
1. We’ll reach a larger audience because consumers are loyal to both brands.
We expect to maintain both the Zillow and Trulia consumer brands, both of which have large and loyal consumer followings with limited overlap. Though audience may differ, Zillow and Trulia have a shared mission of empowering consumers with vital information about real estate and making connections to the best local professionals.
2. We’ll improve listing infrastructure, including the way we distribute and support listings information.
This deal will allow for better coordination among our brands when it comes to listing information. Our industry partners will benefit from deeper partnerships and better listing infrastructure, as well as seamless, free distribution of listings across even more platforms, including Yahoo!® Homes, AOL® Real Estate, HGTV®’s FrontDoor®, HotPads™ and MSN® Real Estate, to reach an even larger audience of consumers.
3. We’ll innovate faster and deliver enhanced ROI for our advertisers.
By combining resources, we expect to accelerate innovation on mobile and Web to provide more valuable opportunities to our advertisers. We expect to offer shared services that will enhance agent productivity and marketing and deliver greater return on their investment.
Our focus on building great products and services remains unchanged, as does our larger mission to empower consumers with valuable information and connect them to the best real estate professionals. If you have any questions about this announcement or about the MLS Zillow Partnership Platform, I’d love to hear from you.
Email me at .
Vice President, MLS Partnerships, Zillow, Inc.