Real estate website Zillow has reportedly entered into an agreement to purchase StreetEasy, another popular New York real estate listing site, for approximately $50 million cash, the company announced in a press release Monday, August 19, 2013.
The acquisition will give Zillow access to the complex real estate market of New York City that StreetEasy has already broken into. The purchase is supposedly a strategic move as both the companies share a common goal of helping consumers get real estate-smart and offer comprehensive rental and for-sale listings to both professionals and consumers alike.
"StreetEasy is an excellent strategic fit with Zillow, as we share a common goal: To help consumers become smarter about real estate by communicating comprehensive, unbiased information about apartments and homes. 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," Spencer Rascoff, CEO of Zillow said in the statement.
Zillow will now have access to the 1.2 million users StreetEasy attracts. The latter operates through partnerships with major brokerages and provides authentic information.
However, StreetEasy will be working as a separate unit under Zillow after the acquisition and will maintain its brand name. The company is also excited to join hands with Zillow.
"At StreetEasy, we pride ourselves on bringing much-needed transparency to the New York City real estate marketplace, and being the primary reference site for consumers and real estate professionals. 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," Michael Smith, co-founder and CEO of StreetEasy added in the statement.
With the purchase, Zillow enters the major 'acquisition battlefield' where it has to compete with other popular sites like Trulia and Redfin. More Recently, Trulia purchased Market Leader, another property listing firm for $310 million. Compared to the deal, Zillow's acquisition is small. But experts believe that the deal is nothing short of 'Jackpot.'
Zillow has grown tremendously since its launch. It went public in 2011 and has consistently tried to implement new ideas, using technology to revolutionize the real estate industry. However, it has got its share of bad publicity too. Many people have complained of the site displaying wrong listing information and bad PR services. Realtors have also complained of biases like 'Zip Code Purchasing.'
Despite the bad blood, Zillow continues to vouch for quality service. The company will be selling 2.5 million shares to raise $205 million. It plans on using the money to fund corporate activities like capital expenditure, general administration expenses and other marketing activities, reports Techcrunch.com.
