The following is the transcript of the joint investor call held by Zillow, Inc. and Trulia, Inc. on July 28, 2014.<\/p>\n
Corporate participants include:<\/em> Other participants include:<\/em> Operator<\/strong>: Good day, ladies and gentlemen, and welcome to your conference call to discuss Zillow\u2019s plans to acquire Trulia. At this time all participants are in a listen-only mode. Later, we\u2019ll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, this conference call maybe recorded.<\/p>\n I would now like to turn the conference over to Mr. R.J. Jones, Investor Relations Officer for Zillow. Sir, you may begin.<\/p>\n Raymond Jones, Head-Investor Relations<\/strong>: Good morning, everyone, and welcome to our discussion of the announcement of Zillow\u2019s plans to acquire Trulia. Joining us today on the call are Spencer Rascoff, the Chief Executive Officer, of Zillow; and Pete Flint, the Chief Executive Officer of Trulia. We will start today with prepared remarks from both CEOs, then host a brief Q&A session. We have allotted 30 minutes for this call.<\/p>\n Before we get started, as a reminder, during the course of this call, we will make forward-looking statements regarding future events, including our expectations, regarding Zillow\u2019s proposed acquisition of Trulia. We caution you to consider the important risk factors that could cause actual results to differ materially from those in the forward-looking statements made in the press release and on this conference call. These factors include, but are not limited to the satisfaction of closing conditions, including shareholder and regulatory approval of the proposed transaction. Additional risk factors are described in our press release and under the caption Risk Factors in Zillow\u2019s Annual Report on Form 10-K for the year ended December 31, 2013, Trulia\u2019s quarterly report on Form 10-Q for the quarterly period ended March 31, 2014, and in Zillow\u2019s and Trulia\u2019s other filings with the SEC.<\/p>\n In addition, please note that the date of this conference call is July 28, 2014, and any forward-looking statements that we make today are based on assumptions as of this date. We undertake no obligation to update these statements as a result of new information or future events except as required by law.<\/p>\n I will now turn the call over to Spencer.<\/p>\n Spencer M. Rascoff, Chief Executive Officer & Director<\/strong>: Good morning. As you\u2019ve seen from our press release, today is an exciting day. I\u2019m very pleased to announce that Zillow has entered into an agreement to acquire Trulia. I\u2019m very excited about the tremendous opportunity to combine resources in a way that creates even more innovation and better products for consumers and real estate professionals alike.<\/p>\n Before we get into the structure of the deal, I\u2019d like to touch on some of these opportunities and why I\u2019m so excited about today\u2019s announcement. First off, our plan is to continue to operate both consumer brands, Zillow and Trulia are highly complementary and respected brands with consumer-first philosophies and employee cultures. This shared devotion has allowed both companies to create products that empower consumers through greater information transparency. And we\u2019ve collectively driven incredible advances in home shopping on mobile and web.<\/p>\n Despite Zillow and Trulia\u2019s rapid growth over the past several years, the two firms\u2019 offerings remain differentiated and the consumer overlap in both brands is relatively low. According to comScore, in June of this year, about half of Trulia\u2019s monthly desktop users did not visit Zillow, and about two-thirds of Zillow\u2019s do not visit Trulia. Just as in other categories, such as online dating in the case of IAC, travel in the case of TripAdvisor, the Priceline Group and Expedia, and even weather, where The Weather Company operates weather.com, The Weather Channel, Weather Underground and in telecasts, we believe that having multiple brands inside the same corporate parent allows us to better serve a larger audience, while taking advantage of certain shared backend services.<\/p>\n In fact, Zillow Inc. has already operated this way since our acquisition of our consumer rental brand, HotPads in 2012 and the acquisition of our New York Property StreetEasy in 2013.<\/p>\n Both Zillow and Trulia excel at connecting consumers with professionals through high ROI, seamless advertising on mobile and web. The more real estate client interactions we can drive to real estate professionals, the better the experience for both consumers and our advertisers.<\/p>\n As media companies we view this transaction as a unique opportunity to accelerate our shared growth into a real estate advertising marketplace that is still incredibly fragmented. While nearly all home shopping now starts online, the vast majority of real estate advertising has yet to migrate to the web and mobile. The addressable market for residential real estate advertising is massive at approximately $12 billion annually, yet on a combined basis Trulia and Zillow have less than 4% share of this market. Said another way, over 96% of the ad dollars available in our category are spent elsewhere and mostly offline.<\/p>\n Most real estate agent advertising still goes to offline channels such as newspapers, billboards and direct mail as well as newer players such as display advertising networks, online video, search engine marketing and social media platforms. While still early, we expect these ad dollars will eventually accrue to the most effective channels over the long term. And we expect to be able to offer advertisers a better value proposition as one company.<\/p>\n We anticipate a number of specific benefits as a result of this transaction. First, we can innovate faster. By combining resources and building upon a common foundation for data and development, we expect to accelerate innovation and create new mobile and web products faster than we would separately. By bringing together our unique, yet complementary cultures of innovation, the Zillow and Trulia creative engine can fire on combined cylinders, gain speed and create more products than ever before.<\/p>\n This speed of innovation will be especially evident on mobile. We are experiencing the early stages of a tectonic shift in consumer engagement from desktop to mobile devices in our category. Due to GPS capabilities in smart devices, mobile is rapidly becoming the medium of choice for online home shopping and the majority of homes viewed on Zillow today are viewed on a mobile device. We both believe that there is a looming wave of mobile technology proliferation and broadband network expansion that will enable even greater mobile adoption by consumers. As touch screen devices\u2019 increasingly dynamic mobile content and cloud based development converge, we believe that over the next 5 years to 10 years, consumer mobile usage and all thing home can scale to many times over what it is today. Through a more efficient allocation of investment in human capital, we will be at the forefront of the next wave of advances in mobile home shopping.<\/p>\n The second key benefit is our ability to provide greater access to free real-estate market data. If you shopped for a home 10 years ago your experience would have been dramatically different than it is today with the amount of real estate data and information at your fingertips. Zillow and Trulia were at the forefront of this revolution to set real estate information free. As one company, we expect to take advantage of each other\u2019s knowledge and expertise to continue that mission to help people make more informed decisions.<\/p>\n Third, we can offer our partners broader distribution and deliver greater value and ROI for advertisers. Home sellers and their agents as well as brokerages and participating MLSs will benefit from broader listings distribution across even more platforms to reach an even larger audience. Due to the limit overlap in our unique users, advertisers will get the benefit of a larger network to increase their reach and exposure. We also anticipate shared services and marketing platforms for advertisers that will enhance agent productivity and marketing and deliver greater return on their investment.<\/p>\n And finally we expect to realize sizeable cost synergies. After we combine, we expect to achieve at least $100 million in annualized cost avoidances by the end of 2016, by gaining efficiencies through shared services such as foregone sales and marketing costs.<\/p>\n Now, let me outline the financial terms and structure. As noted in the press release, the value of this deal is $3.5 billion in what will be a stock-for-stock transaction. Upon shareholder and regulatory approval, all the outstanding shares of Trulia will be exchanged for shares of the combined company. This means that each Trulia shareholder will receive 0.444 shares of common stock \u2013 shares of stock in the combined company. Upon close, Trulia\u2019s shareholders will hold approximately 33% of the combined company, while Zillow shareholders will hold roughly 67%. This value represents a 25% premium to Trulia\u2019s closing price on July 25, 2014.<\/p>\n Upon closing, Pete Flint will continue to be CEO of Trulia, reporting to me. This transaction has been approved by both Boards of Directors and is subject to customary closing conditions including satisfaction of regulatory approvals and approval by shareholders of both Zillow and Trulia. Right now, we\u2019re excited about the prospects of the deal and the opportunities ahead. I want to acknowledge Pete Flint, Sean Aggarwal and Paul Levine and the entire team at Trulia for building such an impressive brand and business. We are excited to work together to accelerate advancement of the real estate category through even faster innovation to empower more consumers and help agents and our industry partners to be more successful.<\/p>\n Now, I\u2019m pleased to introduce Pete Flint, the CEO of Trulia.<\/p>\n Pete Flint, Chairman & Chief Executive Officer, Trulia, Inc.<\/strong>: Thank you, Spencer. This is an extremely exciting day for both Trulia and Zillow. Since Trulia\u2019s founding in 2005, we have been focused on creating an online destination that allows consumers who are searching for home, while also providing real estate agents with a highly-effective advertising platform. Over these past 10 years, we have made incredible progress in serving ad transaction ready consumers while building innovative business and brands of which we are extremely proud.<\/p>\n Trulia and Zillow, each have a long history of creating fantastic products on mobile and web for homebuyers and sellers and for their real estate agents. We believe that molding of our complementary brands\u2019 unique data and [ph] end (9:52) user experiences creates tremendous potential for our combined company to innovate faster and grow further in what\u2019s a huge and a massive market opportunity.<\/p>\n Over the years Trulia has nurtured an amazing culture of innovation. I would like to take this opportunity to thank all our employees for their hard work and dedication. We are all extremely excited by the<\/p>\n prospect of combining our efforts with the team of Zillow to provide even more value to consumers and our industry partners going forward. Sean and I will report Trulia\u2019s Q2 results this Thursday and we\u2019ll host a quarterly results conference call at 2 P.M.<\/p>\n With that, I will turn the call back to Spencer, to take your questions.<\/p>\n Operator<\/strong>: Thank you. [Operator Instructions] And, our first question comes from Mark Mahaney from RBC. Your line is open. Please go ahead, sir.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Sure. I\u2019ll jump on that one, Mark. So the cost avoidances, the $100 million in 2016 come from a combination of things including forgone advertising expense and heads that we won\u2019t need to hire as a combined company, both of us, both of our companies have literally hundreds of open heads, because we\u2019re running so fast. And I think as a combined company, we\u2019ll be able to avoid a lot of new hires.<\/p>\n And on the advertising point just to backup for a second, we\u2019re going to continue to invest significantly in both of these brands, but I still think there will be cost avoidances on the advertising side available to us as a single company. In terms of market leader I\u2019ll say, our companies have a very similar philosophy, which is real estate agents who use technology are better agents and better agents make for better advertisers.<\/p>\n And we\u2019ve actually gone about, we both have that thesis and in the case of Zillow we acquired a CRM, Buyfolio, and then we use diverse solutions and another acquisitions to help take it national. In the case of Trulia they acquired Market Leader and then in the case of Zillow we also connected to many other CRMs to give agents choice.<\/p>\n So, we have slightly different implementations of what I consider to be the same fundamental strategy which is that agents using technology are better and therefore make for better advertisers. So that philosophy is not going to change. It\u2019s going to be months before the transaction closes and we\u2019re going to announced operational and organizational specifics once the acquisition closes.<\/p>\n So I can\u2019t comment further than that other than to stay, we both believe that technology enabled agents are the wave of the future.<\/p>\n (Q \u2013 Mark Mahaney \u2013 RBC Capital Markets LLC)<\/strong>: Thanks, Spencer.<\/p>\n Operator<\/strong>: Thank you. Our next question comes from Ron Josey from JMP Securities.<\/p>\n (Q \u2013 Ron Josey \u2013 JMP Securities LLC)<\/strong>: Thanks, thanks for taking the question, two please. So first and foremost, why now? Both the companies continue to grow at very strong rates, taking share and $3.5 billion seems to be a significant premium and I\u2019m wondering just, why now?<\/p>\n And then the next question is just quickly Spencer and Pete, are there any markets were Trulia is stronger than Zillow and vice versa and particularly how that might impact pricing? Thank you.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Sure. So in terms of why now? I guess I\u2019d say why not now? Both companies come at this from a position of strength, we both have a lot of momentum behind our businesses in terms of revenue growth and traffic growth and audience growth.<\/p>\n And we, like you, agree that this combination makes a lot of sense and we are very fortunate that the stars aligned in terms of both parties finding common ground on the transaction. The headline price, just to be clear, it\u2019s an all-stock deal at a 0.444 exchange ratio. The way I think about it is, the pro forma ownership of two-thirds, one-third and sort of the question \u2013 to your question, Ron, about the premium \u2013 the question that we as a Zillow board asked ourselves is, would we rather own a 100% of Zillow or two-thirds of the combined company? And the unanimous decision was we\u2019d rather own two-thirds of the combined company.<\/p>\n So I think, you can kind of \u2013 if you start looking at the total price and looking at deal multiples, you can start sort of going crazy, trying to think through the transaction. If you think about it as an exchange ratio, stock deal, and pro forma ownership, I think that\u2019s how we approached it and I think we found common ground there. In terms of markets that the two brands are stronger than \u2013 that one brand might be stronger in than another, we can\u2019t share anything specific on that right now. I do think, I will say that how these brands will complement each other in the marketplace is something that I can comment on.<\/p>\n So, Zillow focuses on all homes and we have information not just on those on the market, but also those off market. Trulia has that information as well, but their brand and their product is more focused on, directly on home shopping and rental shopping. So I think as these brands evolve in the marketplace that\u2019s probably the way they\u2019ll each evolve in the consumers\u2019 minds\u2019 eye where one brand is kind of 100% transactional or solely focused on transaction, and the other one appeals to both buyers as well as homeowners. So I think that\u2019s how the brands end up evolving in the marketplace.<\/p>\n (<\/strong>Q \u2013 Ron Josey \u2013 JMP Securities LLC<\/strong>)<\/strong>: Thanks and congratulations.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Sure. Pete do you \u2013 feel free to jump in if you want to add on that or anything else? We\u2019re in different locations, Pete\u2019s in San Francisco today and I\u2019m in Seattle, so.<\/p>\n (Q \u2013 Ron Josey \u2013 JMP Securities LLC)<\/strong>: Thank you.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Okay. I guess we\u2019ll go to next question.<\/p>\n Operator<\/strong>: Our next question comes Chris Merwin from Barclays. Your line is open. Please go ahead.<\/p>\n (Q \u2013 Chris Merwin \u2013 Barclays Capital, Inc.)<\/strong>: Thanks and congratulations on the deal. So in terms of the cost savings, what is the target model now for the combined Zillow, Trulia, is 40% to 45% between EBITDA margins, still the right number to think about for the margin opportunity in time and at what level of revenue do you expect to get to that target model?<\/p>\n And then secondly just in terms of the decision to keep the brands separate, obviously I think that makes a lot of sense in terms of demand generation, but from a selling perspective, are you going to maintain two separate sales forces and how will those sales forces prioritize one brand versus the other and obviously Trulia sells impressions differently than Zillow, so just curious if that will continue? Thanks.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.<\/strong>): So on the target model, we don\u2019t have anything to update yet. I think it\u2019s fair to say that we wouldn\u2019t do this deal if we didn\u2019t think it would change the pro forma trajectory of the company and we\u2019ve already put one line in the sand in terms of cost avoidances for 2016. But we don\u2019t have an update to the target model other than to say it ought to be accretive or else we wouldn\u2019t have done this transaction with one another.<\/p>\n In terms of the ad products and the sales teams, all this will be announced at closing or kind of right around the closing time. Clearly there will be, clearly we will eventually unify some of these different ad products because one of the benefits of the transaction is that we feel we can go to our advertisers with one platform, much as we, both brands already do that to advertisers.<\/p>\n For example, when Zillow sells impressions to a premier agent, those impressions are consumed on Zillow, on HotPads, on MSN, on AOL, on Yahoo, et cetera and Trulia also represents other sites. So I think eventually the plan is to follow a similar strategy, but we can\u2019t announce any other specifics now, they\u2019ll become more apparent closer to closing.<\/p>\n (Q \u2013 Chris Merwin \u2013 Barclays Capital, Inc.)<\/strong>: Thank you.<\/p>\n Operator<\/strong>: Thank you. Our next question comes from Heath Terry from Goldman Sachs. Your line is open. Please go ahead.<\/p>\n (Q \u2013 Heath Terry \u2013 Goldman Sachs & Co.)<\/strong>: Great. Thanks. Spencer, wondering, I know a lot of the organizational details are planned for the future, but wondering if you could give us a sense of how you\u2019re thinking about the sales organizations between the two companies, whether or not unifying those and getting some efficiencies out of those sales organizations as part of the cost synergies that you\u2019ve identified in the press release and how quickly post the closing, do you see agents being able to buy across the combined platform?<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: So, yes, embedded in the $100 million 2016 number, is both, foregone advertising as well as sales team efficiencies and foregone additional new hires. So, yes, that is in there. In terms of the timeline of when agents might buy media across these multiple brands, I really couldn\u2019t say, closer to closing we\u2019ll hopefully have an answer to that.<\/p>\n (Q \u2013 Heath Terry \u2013 Goldman Sachs & Co.)<\/strong>: Great, thanks.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Sure.<\/p>\n Operator<\/strong>: Thank you. Our next question comes from Neil Doshi from CRT Capital. Your line is open, please go ahead.<\/p>\n (Q \u2013 Neil Doshi \u2013 CRT Capital Group LLC)<\/strong>: Great, thanks for taking my question. Congrats on the deal, guys. Spencer, how do you think about cross-selling opportunities? I know you guys do some stuff on mortgages, do you think that with the opportunity to cross sell to both the user base of Trulia as well as having opportunities to cross-sell Trulia products over to the user base of Zillow is, have you given thought as to what types of revenue synergies we could see from cross-sell opportunities? And then in terms of the mobile side, it seems like Trulia, slightly under indexes mobile relative to Zillow, so what do you think needs to happen there to bring Trulia\u2019s mobile experience to parity with Zillow\u2019s?<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Sure. I\u2019ll take the second one, and then I\u2019ll let Pete comment on the cross-sell. I\u2019ll just say, Trulia\u2019s mobile experiences are awesome. We admire them, and we think their native apps are fantastic, their mobile web experience is great and in a lot of places on mobile, I believe, the Trulia experience is ahead of the Zillow experience. In some other places, I think the Zillow experiences are better than Trulia experiences, but Trulia has got nothing, they have a fantastic mobile experience. Pete, on cross-sell with mortgages and maybe rentals on Trulia, do you want to take that one?<\/p>\n (A \u2013 Pete Flint \u2013 Trulia, Inc.)<\/strong>: Yeah. So I think there\u2019s tremendous opportunities in cross-sell opportunities for consumers. So Trulia, as Spencer said, we\u2019ve been primarily focused on home shoppers and so we\u2019ve less developed mortgage monetization as well as rental monetization, so we enormous traffic, which we know there\u2019s interests in renting and interest in looking for a mortgage. So, we see tremendous opportunities over time in using the expertise that Zillow has built up around the two categories and bringing those on to the platform. So we\u2019re excited about \u2013 especially those areas that have very low hanging fruit. So, we\u2019re excited about executing on these opportunities.<\/p>\n Operator<\/strong>: Thank you. Our next question comes from Chad Bartley from Pacific Crest. Your line is open. Please go ahead.<\/p>\n (Q \u2013 Chad Bartley \u2013 Pacific Crest Securities LLC)<\/strong>: Hi. Good morning. Thank you, so the information on the consumer overlap is helpful. Can you provide any data on agent subscriber overlap? And then, in terms of revenue synergies, can you talk about potentially pulling up Trulia\u2019s agent ARPU more in line with Zillow and how you\u2019ll approach that?<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: So, we aren\u2019t disclosing the agent overlap, but I\u2019ll say it\u2019s lower than, it\u2019s not very significant. And maybe, I guess we\u2019ll huddle on maybe, on future earnings calls or whatever, certainly at closing we can talk about agent overlap, I\u2019m not sure if we\u2019re ready to talk about it just yet. But, there is a lot of opportunity there.<\/p>\n In terms of ARPU, just to be clear, until closing both companies are operating business as usual. And so, there will be no change to Zillow\u2019s sales strategy or advertising strategy and I\u2019ll have, Pete is still running an independent public company until closing, so I\u2019ll defer to him, but I\u2019m sure he\u2019ll say that Trulia also doesn\u2019t have any change to their operating plan.<\/p>\n So where might ARPU go post-closing? Well, that comes back to the question about kind of when \u2013 what type of integration we do on the sales side and on the ad products side, and again unfortunately we\u2019re not ready to share details like that just yet.<\/p>\n (Q \u2013 Chad Bartley \u2013 Pacific Crest Securities LLC)<\/strong>: Okay. Thank you.<\/p>\n Operator<\/strong>: Thank you. Our next question comes from Jason Helfstein from Oppenheimer and Company. Your line is open. Please go ahead.<\/p>\n (Q \u2013 Jason Helfstein \u2013 Oppenheimer & Co., Inc. (Broker))<\/strong>: Thanks. So, kind of two questions. First, both you and Trulia make most of your money right now from products focused largely on agents trying to find buyers, just talk about how you think this will create synergies with a seller-oriented product? And then secondly, if you can just talk about, the bigger entity will now have more resources, does this make it more palatable to effectively go out try to create your own MLS deals, so the company is less dependent on other third-party data sources? Thanks.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: So I guess, I\u2019ll let Pete start with the seller-lead question, because Trulia has a dedicated seller-lead product and Zillow does not. So, Pete I\u2019ll throw that one to you.<\/p>\n (A \u2013 Pete Flint \u2013 Trulia, Inc.)<\/strong>: Yeah. So I think the nature of the ad products generally is, we\u2019re playing in a highly-fragmented market where zip code by zip code, individual agents are looking for individual home sellers or home buyers and that is one of the benefits of scale, so we can better serve our real estate agent customers by giving them more targeted prospects. So it\u2019s greater value for our customers and better ROI. So, we\u2019re pretty confident that the benefits of scale from both sides means that we can deliver better, just very, truly from this better scale, better quality leads to our agent customers.<\/p>\n And like Spencer said it\u2019s pretty early on and we\u2019re working through the pre-close period, so to think independently about what are some of the opportunities together.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: On the MLS question, both companies already have a strategy which is quite apparent for those that follow us closely of acquiring more listings directly from MLSs and from brokerages rather than through third-party syndication services that send us listings.<\/p>\n I think in the case of Trulia there are many dozens of MLSs that send them feeds directly. In the case of Zillow, we\u2019re well on our way towards achieving that. So that will continue all over through this period and beyond. I think it is quite clear \u2013 it ought to be quite clear to a listing agent or their broker that it behooves their seller to have their listings displayed on Zillow or Trulia or sites that Zillow powers like MSN, AOL and Yahoo.<\/p>\n In fact, it\u2019s almost inexplicable to me how an agent, a listing agent could say to their seller their listing is not on these web sites and mobile services. And I think that increasingly the industry has reached that conclusion that it benefits the seller and the seller\u2019s clients and therefore listings ought to be displayed on these web sites, particularly in light of the fact that it\u2019s free, to display these listings on these web sites. So that\u2019s \u2013 both our companies will continue to acquire more direct listings, relationships with workers and MLSs and, during this period, as well as post-closing.<\/p>\n (Q \u2013 Jason Helfstein \u2013 Oppenheimer & Co., Inc. (Broker))<\/strong>: Thank you.<\/p>\n Operator<\/strong>: Thank you. And ladies and gentlemen, we have time for two more questions. And our next question comes from Lloyd Walmsley from Deutsche Bank. Your line is open. Please go ahead.<\/p>\n (Q \u2013 Lloyd Walmsley \u2013 Deutsche Bank Securities, Inc.)<\/strong>: Thanks, guys. I\u2019m wondering if you can just comment a little bit on the potential revenue synergy around the mortgage monetization and display, I know Trulia is a little bit behind in terms of monetizing its mortgage leads. Could you just, be a meaningful uptick from plugging that into the Zillow monetization engine? Similarly, on display as they\u2019re kind of a pricing premium, do you think you can get with the greater reach? And then, I guess when you look at some of the other [ph] transactions, like rentals, (28:05) and just having a much larger base allow you guys to both monetize that a lot faster?<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Yeah. And so, I\u2019ll start and then, Pete, please feel free to chime in, if you like. So mortgages, display and rentals, there are significant revenue opportunities from working together in these three adjacencies. In the case of mortgages, as you know Lloyd, our mortgage marketplace monetizes well. It\u2019s a great consumer experience. It\u2019s something that we now power the mortgage marketplace for HotPads and StreetEasy, as well as AOL.<\/p>\n We don\u2019t have any make specific plans to announce right now about what might happen on Trulia with respect to mortgages, but I do believe there are synergies to be had in the mortgages business between this two companies.<\/p>\n On display, I can\u2019t comment specifically, but other than to say, yes, I think there will be synergies. On rentals, I will comment and I\u2019m sure Pete will too. We\u2019re both very excited about the rentals opportunity. Each of us independently have very large rental audiences and we\u2019re both in the early stages of monetizing those rental audiences and I think together we have a significant opportunity to address the billions of dollars in multifamily rental advertising which is before us. Pete?<\/p>\n (A \u2013 Pete Flint \u2013 Trulia, Inc.)<\/strong>: Yeah, no. We\u2019re excited about it. We\u2019ve been thinking about focusing on, we\u2019re planning on focusing independently on monetization. But I think the benefit, one of the benefits of this deal is that we can focus incremental resources on further consumer innovation and product development within the independent brands.<\/p>\n So it really gives, it can really push the consumer experience forward while monetizing the category which we\u2019re tremendously excited about.<\/p>\n (Q \u2013 Lloyd Walmsley \u2013 Deutsche Bank Securities, Inc.)<\/strong>: Thanks, guys.<\/p>\n Operator<\/strong>: Thank you. And our final question comes from James Cakmak from Telsey Advisors Group. Your line is open. Please go ahead.<\/p>\n (Q \u2013 James Cakmak \u2013 Telsey Advisory Group LLC)<\/strong>: Hi thanks and I\u2019ll extend my congratulations as well. Spencer, you talked about the idea behind the deal of owning two-thirds of a combined company, definitely makes sense. I guess, on the flipside to that, Pete, I guess why does it make sense for you to earn, to own one-third rather than a 100% of Trulia? And then just secondly how do you think about then the agency and broker relationships and feedback in response to this deal and operating as a combined company? Thank you.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: Yeah. Pete, why don\u2019t you just take the first part? And, I\u2019ll take the industry relations portion of James\u2019 question.<\/p>\n (A \u2013 Pete Flint \u2013 Trulia, Inc.)<\/strong>: Yeah. So you know, I think we\u2019ve obviously competed in the market place for many years. And I think we have just had tremendous respect for the team at Zillow and I think the, and as you can see from the deal today, this is a tremendous deal for shareholders. We also think it\u2019s a tremendous deal for our employees and other partners.<\/p>\n So I think it\u2019s on the sort of philosophically going in and then for shareholders going in, we think it\u2019s a great deal. Just, it\u2019s also, as we think about how the category is evolving, like this is, both teams are increasingly spending on marketing. And that, we\u2019re very conscious of that and I think under this scenario, while we\u2019ll continue to spend on marketing, we think we can do it more efficiently than as a standalone. And we think that\u2019s an incremental benefit to us. And we think it\u2019s an incremental benefit to the combined entity.<\/p>\n (A \u2013 Spencer Rascoff \u2013 Zillow, Inc.)<\/strong>: On the industry front, I\u2019m optimistic that the industry will view this as a positive. If the e-mails in my inbox for the last hour are any indication, for example, there are many premier agents, advertising agents at Zillow that are incredibly excited about this news and can\u2019t wait to also have access to Trulia\u2019s audience.<\/p>\n And on the broker franchisee, franchisor, and MLS front, I think most industry participants realize that having a company with a large audience and with the resources to build great products in order to move the industry forward, is advantageous for the industry. So I\u2019m looking forward to discussing it with the industry and certainly the early feedback has been great.<\/p>\n (Spencer M. Rascoff, Chief Executive Officer & Director)<\/strong>: I think with that, we need to wrap up to get to the respective employee meetings and other things this morning. So, thank you very much. Pete and Sean will be hosting Trulia\u2019s earnings call on Thursday. Chad and I will be hosting the Zillow earnings call next Tuesday. And thank you all very much for your time and interest. Talk to you all soon.<\/p>\n Operator: Ladies and gentlemen, thanks for participating in today\u2019s conference. This concludes our program. You may all disconnect and have a wonderful day.<\/p>\n","protected":false},"excerpt":{"rendered":" As Zillow announces their plans to acquire Trulia, the two companies held a conference call to discuss the deal with investors; we’re providing the full transcript for you to peruse without interjection from the galley. <\/p>\n","protected":false},"author":335814,"featured_media":2628,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"wds_primary_category":0,"footnotes":"","jetpack_post_was_ever_published":false,"_links_to":"","_links_to_target":""},"categories":[101,124],"tags":[99,100,627,102],"class_list":["post-2627","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate","category-zillow-corporate","tag-breaking-news","tag-hot-stories","tag-trulia","tag-zillow"],"jetpack_featured_media_url":"https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2014\/07\/trulia.png","jetpack_sharing_enabled":true,"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/2627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/users\/335814"}],"replies":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/comments?post=2627"}],"version-history":[{"count":3,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/2627\/revisions"}],"predecessor-version":[{"id":4651,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/2627\/revisions\/4651"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media\/2628"}],"wp:attachment":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media?parent=2627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/categories?post=2627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/tags?post=2627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nRaymond Jones \u2013 Head-Investor Relations, Zillow, Inc.
\nSpencer M. Rascoff \u2013 Chief Executive Officer & Director, Zillow, Inc.
\nPete Flint \u2013 Chairman & Chief Executive Officer, Trulia, Inc.<\/p>\n
\nMark S. Mahaney \u2013 Analyst, RBC Capital Markets LLC
\nRon Victor Josey \u2013 Analyst, JMP Securities LLC
\nChris Merwin \u2013 Analyst, Barclays Capital, Inc.
\nHeath P. Terry \u2013 Analyst, Goldman Sachs & Co.
\nNeil A. Doshi \u2013 Analyst, CRT Capital Group LLC
\nChad W. Bartley \u2013 Analyst, Pacific Crest Securities LLC
\nJason S. Helfstein \u2013 Analyst, Oppenheimer & Co., Inc. (Broker)
\nLloyd Walmsley \u2013 Analyst, Deutsche Bank Securities, Inc.
\nJames M. Cakmak \u2013 Analyst, Telsey Advisory Group LLC<\/p>\n
\nUntil we obtain these approvals, we\u2019ll continue to operate as independent companies, running separate businesses. This includes reporting results for the second quarter and subsequent quarters. We expect these approvals will take several months. Upon closing, we\u2019ll be able to share more about the operational and organizational structure moving forward.<\/p>\nQuestions and answers<\/h2>\n