) is aggressively building its position in the real estate
vertical. Recently, its investment division Google Capital bought
a stake in online real estate website Auction.com for $50.0
million. This deal follows Google Capital's investments in
Renaissance Learning, Survey Monkey, and Lending Club.
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Auction.com raised $91.0 million from previous investments and
the recent investment takes its value to $1.2 billion. Google's
interest in the website primarily resulted from the rumor that
Aution.com has been preparing for an Initial Public Offering
(IPO). We believe that the stake buildup is positive for Google
as it will help it to enter the online real-estate market.
Per the deal, a Google Capital executive will be included in
Auction.com's board of directors and another executive will hold
the position of a board observer. The investment will also allow
Google to access Auction.com's residential and commercial real
estate data, which will help it to attract marketers, thereby
driving advertising revenues going forward.
Apart from Google Capital, Auction.com's other shareholders
comprise Starwood Capital Group, Starwood Property Trust, Stone
Point Capital and Fortress Investment Group. We believe that
Google's backup will boost Auction.com's competitive position
Auctions.com was launched in 2008 for facilitating online deals
between real estate vendors and customers. Like real-estate
) it provides search and other locationary functions. However,
the sell process follows an auction pattern, much similar to
), where the highest bidder is the winner. To-date, Auctions.com
has sold properties worth more than $26.0 billion.
Google Capital plans to invest nearly $300.0 million this year to
support late growth stage companies. The investments reflect
Google's diversification plans, which will help it to compete
with the likes of
) in the advertising market over the long term.
Currently, Google has a Zacks Rank #3 (Hold).