Zillow to acquire rival real estate website StreetEasy for $50mn [Big News Network (United Arab Emirates)]
(Big News Network (United Arab Emirates) Via Acquire Media NewsEdge)
NEW YORK - Zillow, Inc., the largest U.S. real estate and home-related marketplace, has entered into a definitive agreement to acquire StreetEasy, the rival real estate website in New York City, for $50 million in cash.
The company said the acquisition was an effort to enter one of the most lucrative US housing markets.
"StreetEasy has cracked the code in New York," said Zillow boss Spencer Rascoff in a statement. "They now have a local network effect where nearly every New York broker is active on StreetEasy because of the site's large audience and comprehensive data."
Zillow also announced a public offering of 2.5 million shares.
StreetEasy attracts nearly 1.2 million1 monthly unique users, primarily home shoppers in the New York region. This acquisition gives StreetEasy the resources to further invest in product development and grow its audience, while offering Zillow clear market leadership in the country's largest and most important real estate market.
By aggressively courting estate agents in the city, StreetEasy has grown in scope and relevance over the past few years - a particularly crucial time, as the price paid per square foot in Manhattan has been booming as of late.
Although the site is primarily focused on New York City, it also shows listings for properties in Philadelphia, Washington DC, South Florida and parts of New Jersey, as well as the Hamptons on Long Island.
It is expected that this deal will allow the company to further expand its reach nationally across the US.
Zillow had its stock market debut in July 2011, as part of a wave of other high-profile public offerings of technology companies such as LinkedIn and Pandora.
Although the company reported a net loss of $10.2million in its recent earnings statement, revenue exceeded expectations, as the housing market recovery in the US has helped buoy traffic and sales.
Most recently, new data on housing permits released last week showed continued strength.
Zillow now estimates its monthly traffic at 61 million users across the US.
It has sought to aggressively buy up smaller competitors to compete against Trulia, another web-based property listing service. StreetEasy is Zillow's seventh acquisition.
The transaction is subject to satisfaction of customary closing conditions and is expected to close in the next few weeks.
"StreetEasy is an incredibly strong and recognized brand in New York City, and complements Zillow's dominant and growing national brand. We're delighted to welcome the enormously talented and knowledgeable StreetEasy team on board," said Rascoff.
Launched in 2006, StreetEasy has 34 employees. It provides comprehensive for-sale and for-rent listings through partnerships with all of the largest real estate brokerages in New York.
Michael Smith, co-founder and CEO of StreetEasy stated, "We're very excited to be joining forces with Zillow, the largest national brand in mobile and online real estate, as we continue our commitment to data integrity, innovation and collaboration with the local real estate community."
In addition to listings, StreetEasy provides information about condos, co-ops, new developments and luxury real estate. They also have a popular blog featuring tips and news for New York renters and buyers.
Earlier this month, the site hosted a question-and-answer session with President Barack Obama, centred on his housing speech in Phoenix, Arizona - a state that had been particularly hard hit by the mortgage collapse in 2008-2009, but which has now recorded some of the fastest-growing property sales in the US.
Investors have been impressed by Zillow's performance: the stock has risen close to 150% in the past year.
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