Zillow (NASDAQ:Z) has just announced it will purchase real estate search engine HotPads for $16 million in cash, a deal that will bolster its rental segment.
Founded in 2005, HotPads gets about 2.8 million monthly users, who tend to be a younger demographic that likes to use social media, like Facebook (NASDAQ:FB), and smartphones. The company has five mobile apps across Apple’s (NASDAQ:AAPL) iOS and Google’s (NASDAQ:GOOG) Android platforms.
Acquisitions have become a key part of the company’s growth strategy. Over the past two years, Zillow has struck six deals. The HotPads purchase follows Zillow’s summertime rental move, when it purchased RentJuice, which became the basis of Zillow’s rental marketplace.
Zillow’s stock is off about 1% in Tuesday trading.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.