Zillow acquisition will affect New York real estate market
StreetEasy, a seven-year-old real estate website that generates just over 1 million unique users per month, was recently bought by Zillow. The latter firm, a larger real estate website, paid $50 million to complete the transaction, which is part of its efforts to keep current with competing sites such as Trulia.
As StreetEasy specializes in New York, Zillow CEO Spencer Rascoff told Bloomberg that the technology acquisition will help his company expand its presence in the largest U.S. market. Additionally, the Zillow sales team could bolster advertising and subscription revenue faster than StreetEasy could as an independent company.
On a statement on the company blog, Zillow explained that the acquisition made sense because StreetEasy not only has 1.2 million monthly users—mainly in the New York region—but the two companies share a common goal. Each firm wants to help consumers become smarter about real estate.
"They've dug deep into the complex New York real estate market and offer comprehensive for-sale and for-rent listings, as well as additional data organized and presented in ways that help consumers and real estate professionals alike," Zillow said.
The New York Times reported that StreetEasy has a very tech-minded and transparent approach to listings. For example, it will list how many days an apartment has been on the market, what it previously sold for and how much other apartments in the building have gone for.
As M&A activity like this proves, larger firms will often need the technical expertise of smaller companies. Finding a business with complementary goals and a similar customer base will allow for an easier transitional period and ensure that all parties can be satisfied with the outcome.