Zillow will acquire Trulia in a $3.5 billion stock deal, the companies announced Monday.

The deal, approved by both companies' boards, is expected to close next year.

The real estate brands will continue to operate under their individual names. Trulia CEO Pete Flint will maintain his position and report to Zillow CEO Spencer Rascoff.

'This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry,' Rascoff said in a release.

The companies expressed hope that the merger will provide better opportunities for leveraging ad sales, the primary source of revenue for both companies. According to a release, the combined revenue of both companies represents less than 4% of the estimated $12 billion real estate professionals spend on marketing.

Zillow shares are down about 3% in premarket trading, while Trulia stock is up more than 15%.

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