Trulia (TRLA) acquired by Zillow (Z) for $3.5 billion in July 2014.

Trulia (TRLA) was acquired by Zillow (Z) for $3.5 billion in July 2014.

  

Online real estate giant Zillow (Z) in reported $2 billion bid for Trulia (TRLA)

Two of the most popular real estate sites in the nation -- Zillow and Trulia -- may combine in a move that would create an online colossus in a tradition-bound industry disrupted by massive technology change in recent years.

Seattle-based Zillow, the leading online site based on the number of users, is making a bid to buy San Francisco-based Trulia, the second most popular site, for as much as $2 billion, according to a report Thursday by Bloomberg that cited unnamed sources. Neither company would comment on the report.

Both sites have brought tremendous changes to the process of buying a home. Trulia has an easy-to-use app that allows potential buyers to shop on their mobile phones, while Zillow has the best-known way for homeowners and virtual lookie-loos to get an estimate of how much a home is worth. But some in the industry worry the combination would harm consumers, leading to less competition and less innovation.

Combined, the company would have more than 80 million unique visitors, according to the market research firm Comscore, and nearly 90 percent of the market.

Trulia's shares jumped more than 32 percent or $13.16 a share on the report, and Zillow's shares were up more than 15 percent or $19.29 a share at the close of the market. Both companies have enjoyed a run-up in stock prices this year.

weekly charts:

"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," said Charles Stubbs, chief executive officer of RentPath, whose websites include ApartmentGuide, Rent.com and Lovely.

It would also create a more formidable competitor to San Jose-based Move Inc., which operates realtor.com for the National Association of Realtors. Realtor.com was third in unique monthly visitors in March, according to Comscore.

Move declined to comment on the report.

If the acquisition is completed, Zillow swallows a challenger to its business, leaves consumers with one less place to browse for real estate for sale or rent, and real estate agents one fewer place to list homes for sale.

"I don't know that this is a good thing for the consumer," said Myron Von Raesfeld, president of the Santa Clara County Association of Realtors. "I don't think eliminating the options for the consumer ultimately benefits the consumer."

Competition between the companies has led each of them to substantially increase their advertising and improve their websites.

With an acquisition, they can cut their advertising spending significantly, "and no longer be in this ad race" for traffic, said Daniel Kurnos, an analyst with the Benchmark Company.

Trulia also has made a big push on its mobile app, while Zillow has continued to generate traffic with its popular home valuation site. Not long ago it launched a home remodeling web page. Both companies make revenue by charging real estate agents to list property on their sites.

Zillow and Trulia also list homes and apartments for rent.

The acquisition would be one more disruptive event in a real estate marketplace punctuated by rapid change and recent acquisitions.

Trulia acquired Market Leader last year, giving it a tool to help agents track down leads for potential clients. Zillow bought StreetEasy, a New York area real estate site, last year for $50 million.

The acquisition of ZipRealty by Realogy, a franchise that includes many well-known real estate names, was announced this month. ZipRealty is an Emeryville-based company that emphasizes listing, buying and selling real estate online.

"A lot of people in the real estate industry are struggling," ZipRealty's CEO Lanny Baker recently told this newspaper. "They know how to put a sign outside and how to bring in the consumer, but how do they do that online? The big challenge for them is to figure out the digital world."

Another disrupter, Redfin, based in Seattle, is changing the tried and true model in which real estate agents work with brokers to collect commissions on sales of houses. Redfin's agents are salaried and paid according to customer satisfaction, according to the company.

Despite the big traffic numbers generated by Zillow, a substantial amount comes from people using its "Zestimate" tool to see how much their homes, and their neighbors', are worth, said Bradley Safalow of PAA Research. "Half of Zillow's traffic comes from homes that are not for sale. People saying, 'What's my home worth?'"

Safalow said only 15 percent of real estate agents can afford to advertise with the sites.

If the two companies combine, "my expectation is that a lot of brokers will say I'm not going send my listings to you anymore. They might put them on realtor.com" or stop sharing them with the websites, he said. "I think that's the biggest risk in this merger.''

Zillow gains 20% while the market's going down

Yesterday's chart and post:  Zillow (Z) looks good today

Today's market:

Dow Jones

11,200.72-119.99(-1.06%)

S&P 500

1,165.38-12.22(-1.04%)

Nasdaq

2,439.28-28.41(-1.15%)

Zillow (Z) looks good today

Zillow’s Q2: Revenues Up 116 Percent To A Record $15.8M, Hits Profitability

Real estate listings site Zillow reported its first earnings as a public company today, after debuting on the NASDAQ in mid-July. Zillow revealed record revenues of $15.8 million in the second quarter, up 116% year-over-year. Net Income for the quarter came in at $1.6 million, compared to a net loss of $2 million in the same period a year ago and a net loss of $0.8 in the first quarter of 2011. This quarter marked the company’s first quarter of GAAP profitability

Zillow saw record Marketplace Revenues of $9.7 million, up 269% year-over-year. Premier Agent subscribers, which contribute to Marketplace revenues, totaled 13,385 at June 30, 2011, up 180% from 4,777 at the end of the second quarter of 2010. Display revenues increased 30% to $6.1 million from $4.7 million in the second quarter of 2010.

The company’s Average monthly unique users grew 93% to a record 20.8 million in the second quarter of 2011 compared to 10.8 million average monthly unique users for the same period in 2010. And July 2011 marked another record traffic month with 23.2 million unique users to Zillow’s websites and mobile applications, a 98% increase from July 2010.

Zillow CEO Spencer Rascoff said of the company’s first earnings as a public company: “The second quarter was outstanding for Zillow with record revenues, traffic and mobile usage. It marks our first profitable quarter on a GAAP net income basis and our fourth consecutive profitable quarter on an Adjusted EBITDA basis..We’re extremely pleased with our progress and rapid growth, yet we believe we’ve only scratched the surface of our opportunity.”

Zillow up 79%

The company’s initial public offering which priced this week produced the third-highest 1-day return this year for U.S. IPO, according to Dealogic.

The stock was up 79%, behind Qihoo 360 Technology Co. QIHU which had a 1-day close of 134.5% and LinkedIn Corp’s LNKD 1 day close up 109.4% on its offer price. Zillow Z isn’t profitable. It posted a $6.7 million loss last year on revenue of $30.4 million. It’s first-day closing price was about 50% higher than most analysts’ price targets.

Still, Zillow’s IPO success is notable because of its small float. Zillow offered just 3.5 million shares, a 13% stake in the company. It’s not unlike the strategies used by LinkedIn and HomeAway Inc. AWAY.

Combined, small float companies have turned out to be great cash-outs for venture capital firms. One-in-three IPOs this year was backed by VCs – the top 15 1-day returns on all IPOs went to companies backed by VCs, according to Dealogic.

Zillow's (Z) stock more than tripled after its IPO

Zillow's (Z) stock more than tripled after its IPO Wednesday, then fell back to settle up a 79% at the close.

Zillow tracks home values across the country, offers the data online, and sells ads on its site to make money. It had only $30.4 million in revenue last year and lost $6.7 million. Those numbers are modest, but not modest enough to keep the firm from having a market cap now of almost $950 million, a breathtaking multiple of sales.

Zillow set to go public this week

Zillow, a popular real-estate database provider launched in December 2004 by Expedia co-founders Richard Barton and Lloyd Frink, is set to go public this week, offering about 3.5 million shares at $16 to $18.

The offering looks to be popular, too; the indicated price was raised Friday from a range of $12 to $14. The deal could value the company at $458 million.

Based in Seattle, Zillow uses proprietary algorithms to produce an estimated value, or "Zestimate," of more than 100 million U.S. homes—maybe even yours. Buyers, sellers and realtors consult it at no cost, as do nosy folks who want to know what the boss just paid for his latest manse.

The company sells display advertising to real-estate and mortgage brokers, and offers subscription-based advertising services to so-called Premier Agents. Subscription-based ads account for much of the recent revenue growth. But the numbers are surprisingly small, given Zillow's cultural buzz. The company generated revenue of $30.5 million in 2010, up from $10.6 million in 2008. Profits are nonexistent, although losses narrowed to $6.8 million last year, from $21 million in '08.

Individuals and businesses that use Zillow have updated information on more than 27 million homes and added more than 50 million home photos. These profiles include detailed information about homes, such as property facts, listing information and purchase and sale data. On April 11, 2011, the Company acquired Postlets, an online real estate listing creation and distribution platform.

Zillow with a Z will break NYSE grip on one-letter

Zillow Inc. wants to end the New York Stock Exchange’s monopoly on companies trading under a single letter. Zillow, a real-estate website that filed last month to raise as much as $51.8 million by going public, disclosed this week that it applied for a Nasdaq Stock Market listing under the ticker Z.

Assuming the application is approved, Zillow would be the first Nasdaq stock with a one-letter symbol. “They’re doing it to attract attention, obviously,” said Bob Stovall, a managing director and global strategist at Wood Asset Management Inc. who has worked on Wall Street since 1953. “I wouldn’t even notice it or look it up,” he said, if Zillow used the traditional four letters for a symbol.

 Nasdaq-listed companies have been able to trade under a single letter since July 2007, when the Securities and Exchange Commission changed the regulations that governed ticker symbols. Before then, stocks could only have one to three letters on the NYSE or the former American Stock Exchange, now NYSE Amex. Another company preparing for an initial public offering, Pandora Media Inc., plans to list its shares on the NYSE under the letter P. The Internet-music service would become the first company to use that ticker since September 2002, when Phillips Petroleum Co. combined with Conoco Inc. to form ConocoPhillips.

Only Five Left
The Z ticker has been available since March 2003, when Foot Locker Inc. adopted FL as its symbol. Z had previously been used by Foot Locker and three predecessor companies -- Venator Group Inc., Woolworth Corp. and F.W. Woolworth Co. -- since 1925. “We couldn’t be more excited” about Zillow’s plan to adopt the letter, said Robert H. McCooey Jr., senior vice president of new listings and capital markets at Nasdaq OMX Group Inc. in New York.

Using Z “will allow them to brand themselves well.” A Zillow spokeswoman, Charlynn Duecy, declined to comment on the decision. The Seattle-based company provides property- value estimates and displays real-estate listings on its site. Rich Adamonis, an NYSE Euronext spokesman, declined to comment as well. Zillow has yet to determine the price or number of shares for its IPO. Neither has Pandora, based in Oakland, California, which plans to go public with a $100 million stock sale. After the two companies complete their IPOs, only five letters will be available for ticker symbols: I, J, Q, U and W. I has been available since First Interstate Bancorp was bought by Wells Fargo & Co. in 1996. J, U and W have gone unused since 2002. Q opened up last month after CenturyLink Inc. completed a takeover of Qwest Communications International Inc., the only company ever to use that letter for its ticker.

Following Hyatt
The most recent company to adopt a single-letter symbol was Hyatt Hotels Corp., which began trading under the ticker H after its IPO in November 2009. Chicago-based Hyatt succeeded Realogy Corp., which was taken private by Apollo Management LP in an April 2007 buyout. NYSE companies have been able to select tickers with four letters since the SEC’s rules changed. LinkedIn Corp., the first social-media company to go public in the U.S., took advantage of this provision. Shares of the Mountain View, California-based company started trading under the symbol LNKD last week.