Despite a big drop in its share price, Trulia management is digging in its heels on a decision to undertake a $45 million strategic marketing campaign.
Trulia investors, less than thrilled with the company’s fast-growing expenses, drove the share price of the real estate listing specialist down by nearly 18% on Friday. Still, CEO Pete Flint stood by the company’s decision to snag a portion of the $27 billion real estate advertising market in the U.S. — saying now is the time to make a move.
“We think this is the rich long-term opportunity for the business,” Flint said on CNBC’s “Squawk on the Street.” “We see a tremendous opportunity.”
The strategy is akin to that of Zillow, Trulia’s biggest rival, which recently also decided to ratchet up advertising spending to $65 million in 2014, up from $40 million in 2013. Zillow’s shares took a dip on Friday as well, though a smaller one, with the shares of the company closing the day down around 10 percent.
Asked whether Trulia would consider making additional buys in the year ahead, on top of its planned purchase of a marketing company next year, Flint said that he is open to such possibilities.
“We see this as an industry in consolidation,” he told CNBC’s Jim Cramer. “Only a couple of players will survive and scale over the next several years.” [CNBC] — Julie Strickland