Can a Sharp “Move” Deflate Zillow Inc (Z) and Trulia Inc (TRLA)?

Growing by leaps and bounds

These three companies are all growing by acquisition, in attempts to offer more services and tools to attract consumers and brokers to their site.  Zillow has recently acquired Mortech, RentJuice and Hotpads.  Trulia has recently partnered with Rent.com and Apartment Guide to be the exclusive provider of multi-family listings.

Trulia made an aggressive acquisition on May 8, purchasing MarketLeader for $350 million.  This software platform is a unique selling proposition for local brokerages to offer value-added services to their potential customers.

Move has also been active acquiring:  Relocation.com, TigerLead Solutions, and most recently, in May, DoorSteps, to help teach consumers about the home buying process and as a tool for them to link up with professionals to help guide them.

What does this mean for investors?

The National Association of Realtors has made some difficult choices in order to allow Realtor.com to become a more attractive and competitive listing portal.  NAR is a well respected and powerful voice for many professionals in the real estate industry. Will this help attract more advertising revenue to Realtor.com? If so, what does this mean for the high valuation of Trulia Inc (NYSE:TRLA), and for the sky high valuation of Zillow shares? Insiders have been selling stock the past few months at Zillow Inc (NASDAQ:Z) receiving over $20 for each dollar of sales. I would be hard pressed to disagree with their logic. Looking back at the 10 year P/S chart. Something is wrong with that picture.

The article Can a Sharp “Move” Deflate Zillow and Trulia? originally appeared on Fool.com and is written by Bill Stoller.

Bill Stoller has no position in any stocks mentioned. The Motley Fool recommends Zillow. The Motley Fool owns shares of Zillow. Bill is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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