July 31, 2014

Zillow will acquire Trulia

Recently on this blog, it was discussed that the real estate website Zillow had acquired a company called Retsly to help developers more easily create real estate software. It was announced that Zillow has made another acquisition. The company is purchasing Trulia for $3.5 billion in stock, according to an article in Tech Crunch

Trulia is also a website that allows users to search for real estate listings online. Trulia and Zillow have been competitors in the past, but no longer will be once the acquisition is complete. As Tech Crunch details, the deal will result in the companies being able to obtain a much larger combined audience than they were able to achieve individually.

AdWeek explains that both of the websites have a focus on mobile. This makes sense, as more consumers turn to mobile devices to search for products and services and make purchases, and the real estate market is no exception. However, as the article explains, each site has a bit of a different audience. Combining these audiences gives the companies the potential to reach more consumers than they could have as separate entities. 

As has been noted previously on this blog, sometimes an acquisition is beneficial for not only improving the position of a company in the market, but for decreasing the threat of competition. As an article in the New York Times points out, the combination of the two companies will allow them to "dominate the traffic for online home listings." The article goes on to explain that because the deal is in stock, it will be more beneficial to shareholders. 

With a sound acquisition strategy, a company can look to become a stronger player in the market.