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FTC Requests More Information, Zillow Delays Merger

by James F. McClister

A second request from the FTC for more information has Zillow asking for more time.

Early today, major listing syndication service Zillow announced via an SEC filing that it would not consummate the $3.5 billion transaction of Trulia prior to Feb. 1 2015; a result of the Federal Trade Commission requesting additional information from the companies in compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

But don’t be confused, the announcement doesn’t mean the death of the merger. In fact, if the FTC concludes its investigation early, the deal could go through even sooner than the February deadline. Zillow isn’t holding its breath for an early ruling, but, according to its filing, the company does expect the transaction to be completed “in the first half 2015.”

The recent mingling of realtor.com and Move, Inc. promises a significant boon to Zillow and Trulia’s case, but the successful coupling would still represent a significant advantage in terms of market share, which has the antitrust community abuzz. According to Time, a successful merger of the two would mean grabbing hold of 48 percent of all listings Web traffic – an overwhelming majority and more than triple that of realtor.com.

Zillow CEO Spencer Rascoff has issued several statements defending the deal, including in an interview with GeekWire claiming together Zillow and Trulia would only control 4 percent of overall all advertising spending. But critics are working hard to delay and even block the merger.

In August, the New York Post reported the lobbying arm of NAR, one of the most powerful in Washington, was urging regulators to reconsider the deal and the implications it might have on the wider industry. David Lykken of Mortgage Banking Solutions told the publication that he believes NAR is simply nervous, fearing “the beginning of the end.”

Since the announcement of the merger in July, Zillow share prices have dropped 33 percent, and 20 percent in only the last three months.

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