Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: According to Bloomberg, sources familiar with the situation say Zillow could place a value of as much as $2 billion on its smaller rival, and that a deal could be announced as soon as next week. To be sure, shares of Trulia also jumped by more than 30% on the news, giving it a market cap of almost exactly the reported acquisition price.
Now what: That's not to say such a deal is guaranteed to happen, but I can't blame the market for bidding up shares of Zillow today at the thought. To be sure, I touched on Zillow's sizable lead in the online real estate market only a few days ago -- Zillow grew its monthly unique users by 51% in its most recent quarter, to 70.7 million, compared to Trulia's still-respectable 42% growth to 44.6 million during the same period. Over the long term, if Zillow were to combine forces with its largest, fastest-growing rival this early in the game, there could be little to prevent it from absolutely dominating the industry going forward.