Zillow Inc. is acquiring real estate technology provider Diverse Solutions for $7.8 million in cash and stock, the company announced on the same day it reported record third-quarter revenue of $19.1 million.
Irvine, Calif.-based Diverse Solutions provides listings content and powers property searches for real estate agents’ websites and mobile platforms. The company’s 18 employees serve about 6,000 customers.
Zillow said Diverse Solutions will continue to operate as a branded service, with founder and CEO Justin LaJoie joining Zillow as vice president of industry solutions.
"We’re very impressed by the products and team that Diverse Solutions has assembled, and we look forward to offering agents these new solutions for powering their websites and marketing strategies," Zillow CEO Spencer Rascoff said in a statement.
"With this acquisition, Zillow now can offer agents a broad suite of valuable tools to market themselves across the Web and mobile — whether on their own websites via Diverse Solutions, on Zillow, or across multiple sites via our listings distribution service, Postlets."
In a regulatory filing, Zillow said it paid $5.54 million in cash for the company, and issued 75,000 restricted shares of Zillow stock to Diverse Solutions. The $2.23 million in restricted shares of Zillow stock LaJoie received as part of the acquisition will vest over the next three years.
In a separate announcement, Zillow said it posted a net loss of $570,000 for the third quarter after taking a $1.7 million charge related to its move to a new headquarters facility.
Revenue from "Premier Agent" ads sold to real estate agents and pay-per-click advertising purchased by mortgage lenders who provide loan quotes through the Zillow Mortgage Marketplace was up 226 percent from a year ago, to $11.8 million. Premier Agent subscribers more than doubled from a year ago, to 14,876 at the end of September.
Display-ad revenue was up 57 percent from a year ago, to $7.2 million.
On Monday, Zillow announced a partnership with AOL to integrate its Mortgage Marketplace into AOL’s Real Estate and DailyFinance sites. In September, Zillow began powering real estate search for Curbed, the national real estate blog network.
Zillow said it’s raising its expectations for 2011 revenue and adjusted earnings, with adjusted earnings before interest, taxes, depreciation and amortization expected to be in the range of $9 million to $10 million, on revenue of $63 million to $64 million.
