The big news in the real estate industry recently is Zillow’s July 28 announcement of its agreement to acquire Trulia, creating a giant repository of online real estate information. The acquisition comes with a $3.5 billion price tag (a 25% premium on Trulia’s July 25 closing price) to be paid with stock. If all goes according to plan, the deal will be finalized sometime next year.

How big a deal is the proposed merger? The combined annual sales of Zillow, Inc. (NASDAQ: Z) and Trulia, Inc. (NYSE: TRLA) are $340 million, and the two companies have about 2,000 employees between them, so it’s a far cry from the Comcast-Time Warner merger in the works, but it’s big news in our industry.

The world of online listings and real estate valuation is still relatively new, but it’s definitely growing. While most consumers shopping for a new home now start their search online, the vast majority of real estate advertising (a market worth about $12 billion annually) hasn’t migrated to the Web and mobile platforms yet. That provides a tremendous opportunity for companies such as Zillow and Trulia that specialize in providing real estate information online and via mobile platforms. If the merger is completed, it’s estimated that the new company will control 60% of the online listings market and improve operational efficiency.

Some have speculated that the deal might trigger antitrust regulations, and the companies have definitely thought about that possibility. Zillow could choose to break the agreement if federal regulators try to limit the combined company based on antitrust rules, paying a $150 million termination fee and walking away on the termination date for the acquisition agreement, January 28, 2016. Trulia will be limited operationally until the merger is complete or the deal falls apart.

The two companies will keep their separate brands and continue to offer their information for free while selling advertising and software to professionals in the industry. Neither site is currently profitable, but both companies and their shareholders hope the merger will turn the ship in the right direction. The merger will allow for an economy of scale that should increase advertising profits and provide a better and more seamless experience for users looking for up-to-date listings and real estate data.