News Corp has strengthened its position in the real estate advertising market with REA Group's purchase of Australia's largest shared accommodation website.
REA Group, which operates realestate.com.au and is majority owned by News Corp, acquired Flatmates for an initial cash offering of $25 million.
Announcing the deal on Tuesday, REA said it plans to expand the business internationally.
"Flatmates is the number one player in share accommodation by both revenue and audience," REA Group chief executive Tracey Fellows said in a statement.
"REA Group is uniquely placed to accelerate that leadership position."
REA may end up paying more depending on Flatmates' performance over the next two years.
"It's exciting because Flatmates has kind of gone through the transition of being a small startup to being the dominant share accommodation provider in Australia," Flatmates chief executive Thomas Clement told AAP.
Originally established in 1990, the shared accommodation site receives an average of 2.6 million visits and more than nine million searches per month.
Mr Clement said the company had around seven per cent of the market when he came on board in 2012.
Now it claims around 60 per cent.
"We have the dominant traditional property portal teaming up with the dominant share accommodation portal and bringing all those services together," he said.
Mr Clement will remain as head of the company said the site could now enter the traditional property sector more effectively.
REA shares closed up $1.89 cents, or 3.77 per cent, at $52.04.
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