Rightmove PLC (LSE:RMV) fell 3.0% on Wednesday after US rival CoStar signalled it was raising the stakes in the UK online property market.
The US online real estate marketplace, information and analytics provider, which has a market value of US$34.66 billion, fired the warning shot to the UK online property website after completing the £99 million takeover of OnTheMarket yesterday.
CoStar said the acquisition will create a “genuine disruptor” to the established UK market leaders.
Andy Florance, founder and chief executive officer, said: “The current market leader has grown complacent focusing on margin over innovation, and pricing ahead of value."
CoStar plans to invest £46.5 million into sales and marketing in the first full year following the commencement of the integration, six times the current annual media spend, and it said this was more than three times the current annual media spend of Rightmove.
This would mark the first stage of a multi-year investment programme totalling hundreds of millions of pounds to drive more consumers to the OnTheMarket portal.
CoStar said it will take OnTheMarket to new levels of success while keeping costs to advertisers at a sustainable level.