The two companies are working on an acquisition deal which could take a few more weeks before it becomes official. American real estate "shoppers" would usually go to these sites because of their proven track record and satisfied customers turnout.
Zillow shares reached 15.3% at $145.76. This means that its market capitalization amounts to $5.8 billion.
On the other hand, Trulia shares leaped by as high as 40.5% at $57 which made the company reach the market value of $2.10 billion. The increase in shares occurred after a report from Bloomberg News says that Zillow plans to acquire the company in a few days. The New York Stock Exchange shows that the stock ended with a percentage of 32 at $53.74.
Zillow's proposed acquisition would provide the company with an increased share of online shopping on listings and advertising that deal with real estate. There are no comments yet from Zillow and Trulia.
For the record, Zillow and Trulia are by far the biggest in the booming online real estate market and have a combined number of unique visitors reaching a total of 84.6 million in May. The figure, which was reported by Clareity Consulting, is three times the number of their closest rival, the National Assn. of Realtors-affiliated Move Inc.
Both sites have revolutionized the process of buying a home. Zillow is known to have the best home pricing estimate system for homeowners and virtual seekers while Trulia boasts of a user-friendly app that enables potential real estate buyers to do mobile shopping.
Once confirmed, the deal would enhance the pricing power of Zillow. Moreover, the company will gain access to Trulia's software as a way to make it more competitive against Move Inc. The analysis came James Cakmak from the Telsey Advisory Group who had been assigned to cover the upcoming merger.
Some analysts in the industry are worried that the merger would harm consumers. They have a reason to believe that it would lead to less competition and less innovation.
Chief executive officer Charles Stubbs of Rent Path, says, "An acquisition like this will have a huge impact, specifically on the home-buying space and particularly for real estate agents in the single family resale business." RentPath currently has websites that include Lovely, Rent.com, and ApartmentGuide.
Lastly, the merging of Zillow and Trulia would create a stronger competitor to Move Inc. The latter, which is based in San Jose, operates realtor.com under the National Association of Realtors. According to Comscore, the website ranks third in the number of unique monthly visitors for the month of March.
