Zillow (Nasdaq: Z ) today announced that it will purchase rival HotPads for $16 million in cash. Zillow, a real estate information website, said in a press release that the deal represented the first "consumer-facing" acquisition in company history. HotPads is a leading online rental information site, and Zillow believes it will be a valuable asset as it expands its operations to include more rental offerings.
Zillow's CEO emphasized the expertise of HotPads' engineers, calling them "amazing" and praising their "deep understanding" of the online rental search process. HotPads has 19 employees and was founded in San Francisco in 2005. The $925 million Zillow, founded in 2004, has made five other acquisitions in less than two years to boost its unique position in the online real estate information market. The company IPO'd last year, and despite surging nearly 80% on its first day of trading, shares have come back down to earth and now trade closer to their original $20 price tag.
Zillow shares were up modestly today, gaining 0.5% to close at $26.23.