This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Zillow Gets 'Immediate Relevance' in NYC

NEW YORK (TheStreet) -- Zillow (Z) is moving on up to the east side, the west side and everywhere else in New York City, as the Seattle-based online real estate company is acquiring StreetEasy for $50 million in cash.

"Zillow has always coveted StreetEasy," CEO Spencer Rascoff said in an interview with TheStreet. "I've jealously watched them attack and conquer. Zillow has had on-again-off-again conversations with StreetEasy, and the timing finally aligned."

By doing this acquisition, Zillow expands its presence in New York City, as StreetEasy has nearly 1.2 million monthly unique users, with most of them in the New York region. On Zillow's second-quarter earnings call, it noted it had 61 million monthly unique visitors using Zillow via mobile devices and desktops, a year-over-year gain of 66%, helping it generate a non-GAAP profit of a penny a share on $46.9 million in revenue for the second quarter, as Marketplace revenue rose 86% year-over-year to $36.5 million. Display revenue increased 29% during the same time frame to $10.5 million from $8.1 million.

"It gives Zillow immediate relevance in New York City," Rascoff went on to say. "StreetEasy gives us overnight market leadership, and a local network effect." StreetEasy, which is EBITDA profitable, will not change Zillow's previous revenue guidance forecast for 2013.

StreetEasy allows Zillow to continue expanding its offerings by offering not only listings, but information about condos, co-ops, new developments and luxury real estate as well.

Zillow, which has been highly acquisitive this year, is turning its focus away from so-called B2B acquisitions and looking more toward a consumer focus. "HotPads (a previous acquisition) and StreetEasy have consumer brands, so it's a different take at M&A then in the past," Rascoff noted. "We're in audience growth mode. We're a media company, and we believe those that have the largest audience will win, and that's where the money will go."

Following the purchase, Zillow will have approximately $150 million in cash on its balance sheet.

Separately, Zillow also filed a proposed secondary offering, selling 2.5 million shares of Class A stock by the company itself. The proceeds will be used for general corporate purposes. An additional 2,523,486 shares of Zillow's Class A common stock will be sold in the offering by existing shareholders.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,912.11 -70.48 -0.42%
S&P 500 1,969.95 -8.96 -0.45%
NASDAQ 4,442.6980 -2.2110 -0.05%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs