Zillow Group, Inc., or simply Zillow, is an American tech real-estate marketplace company that was founded in 2006, and was created by
Rich Barton
Richard Barton (born June 2, 1967) is an American internet entrepreneur and the chief executive officer of Zillow Group. Barton founded online travel company (and Microsoft spinoff) Expedia, Inc., real-estate internet company Zillow, and job s ...
and Lloyd Frink, former
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washing ...
executives and founders of Microsoft spin-off
Expedia
Expedia Inc. is an online travel agency owned by Expedia Group, an American online travel shopping company based in Seattle. The website and mobile app can be used to book airline tickets, hotel reservations, car rentals, cruise ships, and vacat ...
;
Spencer Rascoff, a co-founder of
Hotwire.com
Hotwire is a travel website that offers airline tickets, hotel rooms, rental cars, and vacation packages. It operates by selling off unsold travel inventory at discounted prices. The company is headquartered in San Francisco, CA, Hotwire, Inc. is ...
; David Beitel, Zillow's current chief technology officer; and Kristin Acker, Zillow's current senior vice president of experience design.
Barton is the current CEO of Zillow, Inc.
Business model
Zillow has stated that it is a media company that generates revenue by selling advertising on its website. In April 2009, Zillow announced a partnership to lend its real-estate search engine to the websites of more than 180 United States newspapers as a part of the Zillow Newspaper Consortium. Zillow shares advertising revenue from the co-branded sites with the newspapers and extends its reach into local markets.
In February 2011, Zillow and
Yahoo!
Yahoo! (, styled yahoo''!'' in its logo) is an American web services provider. It is headquartered in Sunnyvale, California and operated by the namesake company Yahoo Inc., which is 90% owned by investment funds managed by Apollo Global Man ...
Real Estate launched an exclusive partnership creating the largest real-estate advertising network on the web, according to comScore Media Metrix.
Zillow now allows renters to pay rent online to their landlords for properties on the Zillow Rental Manager tool. Zillow charges renters a transaction fee when using debit or credit cards to pay their landlord. However, renters also have a no-fee option to pay their rent by using
ACH.
In 2018, Zillow Group began operations as a blanket referral-fee network without an upfront cost called Zillow Flex. Once brokers close a home transaction with a client, they pay a referral fee out of escrow to Zillow. In areas where Flex partner brokers operate alongside brokers who pay for Zillow Premier Agent upfront, leads and connections flow through the same system and are allocated randomly to partner brokers. Blanket referral fees paid to Zillow Group are not disclosed to consumers, but likely range between 30 and 40% of the entire broker's commission. The main qualification for real-estate brokers who participate with Zillow Flex Program is their willingness to pay a blanket referral fee once the transaction is complete.
History
Barton got the inspiration for funding Zillow when he was working at Microsoft and he realized that the real-estate industry would be transformed. In December 2004, Zillow was incorporated; Zillow's website was launched in February 2006. In 2010, Spencer Rascoff was named CEO of the company. Barton stayed as executive chairman.
In April 2018, Zillow entered the on-demand home-buying market with Zillow Offers. In February 2019, Barton returned as CEO to lead the transition.
In 2018, Zillow signed a partnership with
Century 21 Canada to begin listing Canadian properties on the site, marking the first country outside the United States to be covered by the company.
In February 2020, Zillow's stock was up 18% after going down for four years. In March of the same year, the CEO of Zillow announced a cut in expenses by 25%, and stopped hiring due to the
COVID-19 pandemic
The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identif ...
. In March 2021, Zillow announced plans to increase the workforce by 40% by hiring more than 2,000 employees nationwide by the end of 2021.
Zillow began purchasing homes in 2018/2019 with the goal of becoming a market maker with a per-unit target of within +/β 200 basis points (+/β 2%) of breakeven. In November 2021, Zillow CEO Rich Barton announced the company would shutter the i-buying part of the business, sell its existing inventory, and lay off 25% of its employees.
When Barton announced the company would cease purchasing homes, Zillow owned about 7,000 houses.
The division responsible for acquiring and selling homes, Zillow Offers, resulted in the company losing $420 million in the third quarter of 2021 and the share price plummeted from a high of $200 in 2021 to $30 in 2022.
Acquisitions
* In April 2011, Zillow acquired Postlets, an online real-estate listing creation and distribution platform. Terms of the deal were not disclosed publicly.
* In November 2011, Zillow acquired Diverse Solutions for $7.8 million.
* In May 2012, Zillow acquired
RentJuice
Zillow Group, Inc., or simply Zillow, is an American tech real-estate marketplace company that was founded in 2006, and was created by Rich Barton and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia; Spencer Ra ...
, a software-as-a-service company that allows landlords and property managers to market and lease their rental properties through a set of online tools. RentJuice was acquired for $40 million.
* On October 31, 2012, Zillow acquired real-estate shopping and collaboration platform Buyfolio.
* On November 5, 2012, Zillow acquired
Lincoln, Nebraska
Lincoln is the capital city of the U.S. state of Nebraska and the county seat of Lancaster County. The city covers with a population of 292,657 in 2021. It is the second-most populous city in Nebraska and the 73rd-largest in the United Sta ...
-based mortgage-technology company Mortech for $17 million.
* On November 26, 2012, Zillow acquired
HotPads
HotPads is a map-based rentals and real estate marketplace. Launched in November 2005, the site allows users to search for housing using an interactive map. Listings are displayed at their addresses, allowing users to conduct a location-based sear ...
for $16 million. HotPads, founded in 2005, lists real estate and rental listings on a map-based web interface.
* On August 19, 2013, Zillow acquired
StreetEasy for $50 million.
* On July 16, 2014, Zillow acquired Retsly, a Vancouver, B.C.-based startup that helps developers access real-estate data from multiple listing services (MLS).
* On July 28, 2014, Zillow announced a deal to buy
Trulia
Trulia is an American online real estate marketplace which is a subsidiary of Zillow. It facilitates buyers and renters to find homes and neighborhoods across the United States through recommendations, local insights, and map overlays that offer ...
for $3.5 billion.
[dealbook.nytimes.com/2014/07/28/zillow-to-buy-trulia-for-3-5-billion/]
* On February 17, 2015, Zillow announced the completion of its acquisition of Trulia and the formation of the Zillow Group brand portfolio.
* On July 22, 2015, Zillow Group announced it would acquire
Dotloop
Zillow Group, Inc., or simply Zillow, is an American tech real-estate marketplace company that was founded in 2006, and was created by Rich Barton and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia; Spencer Ra ...
for $108 million.
* On January 3, 2016, Zillow Group announced it would acquire
Naked Apartments
Naked Apartments is a website-based business that connects apartment renters in New York City, United States, with real estate brokers and landlords. The website provides 'on demand showings' and 'reverse search'. Using the Naked Apartments webs ...
for $13 million.
* On August 2, 2016, Zillow Group acquired Bridge Interactive.
* On September 8, 2017, Zillow Group acquired New Home Feed.
* On November 1, 2018, Zillow Group acquired
Overland Park, Kansas
Overland Park ( ) is the second-most populous city in the U.S. state of Kansas. Located in Johnson County, Kansas, it is one of four principal cities in the Kansas City metropolitan area and the most populous suburb of Kansas City, Missouri. As o ...
based national mortgage lender, Mortgage Lenders of America.
* In February 2021, Zillow announced that it had entered into an agreement to purchase ShowingTime, which itself had earlier acquired
Showing Suite
Showing Suite is web-based software that real estate agents, brokers, and home sellers use to automate the showing feedback process and schedule showing appointments. Located in San Diego, California, Showing Suite was incorporated in 2001 under ...
for $500 million.
Website features
Zillow has data on roughly 110 million homes across the United States.
The company offers several features, including value estimates of homes, value changes of each home in a given time frame, aerial views of homes, and prices of comparable homes in the area. It also provides basic information on a given home, such as square footage and the number of bedrooms and bathrooms. Users can also get estimates of homes that have undergone significant changes, such as a remodeled kitchen.
In December 2006, Zillow launched features allowing users to post homes for sale and set a "Make Me Move" price (an informal way to market a home), as well as a real estate
wiki
A wiki ( ) is an online hypertext publication collaboratively edited and managed by its own audience, using a web browser. A typical wiki contains multiple pages for the subjects or scope of the project, and could be either open to the pu ...
. That same year, Zillow teamed with
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washing ...
to offer a feature in Microsoft Virtual Earth that shows aerial photographs.
In December 2009, Zillow expanded its listings to include rental homes.
In late 2013, Zillow began powering
AOL
AOL (stylized as Aol., formerly a company known as AOL Inc. and originally known as America Online) is an American web portal and online service provider based in New York City. It is a brand marketed by the current incarnation of Yahoo (2017β ...
Real Estate. In July 2014, Zillow also took over the real-estate portal for
MSN
MSN (meaning Microsoft Network) is a web portal and related collection of Internet services and apps for Windows and mobile devices, provided by Microsoft and launched on August 24, 1995, alongside the release of Windows 95.
The Microsoft Net ...
Real Estate. In October 2017, Zillow announced to add three-dimensional tours to get 360Β° photos of houses customers are interested in buying or renting.
In July 2018, Zillow released a tool for prospective renters to submit a credit check and eviction history report to landlords.
The company reportedly had 36 million unique visitors in January 2019.
Zillow Mortgage Marketplace
On April 3, 2008, Zillow launched a service called Zillow Mortgage Marketplace. This service allows for borrowers to get custom loan quotes without revealing personally identifying information.
Zillow Mobile
Zillow Mobile apps allow users to view nearby homes based on the user's location.
* April 29, 2009 β
iPhone application
* March 18, 2010 β Android application
* April 2, 2010 β
iPad
The iPad is a brand of iOS and iPadOS-based tablet computers that are developed by Apple Inc. The iPad was conceived before the related iPhone but the iPhone was developed and released first. Speculation about the development, operating s ...
application
* March 31, 2011 β Blackberry application
* July 13, 2012 β Windows Phone application
* November 27, 2013 β Windows 8.1 application
* November 2015 β
Apple TV
An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple fruit tree, trees are agriculture, cultivated worldwide and are the most widely grown species in the genus ''Malus''. The tree originated in Central Asia, wh ...
application
Zillow Advice
On December 16, 2008, Zillow launched Zillow Advice, allowing people to ask real-estate questions online and get answers from the website's community of experts.
Real-estate market reports
Zillow produces home value reports for the nation and over 130 metropolitan statistical areas. The reports identify market trends, including 5- and 10-year annualized change, negative equity, short sales, and foreclosure transactions.
Zillow also releases a Homeowner Confidence Survey. The survey is conducted by Harris Interactive and measures homeowners' perceptions about home-value changes of their own home and the local market.
Neighborhood boundary maps (GIS data)
The Zillow data team has created a database of nearly 7,544 neighborhood boundaries in the largest cities in the U.S. and made them available via Creative Commons Attribute-Sharealike license.
Zestimate
Zillow determines an estimate, also known as a "Zestimate", for a home based on a range of publicly available information, including sales of comparable houses in a neighborhood. According to Zillow, the Zestimate is a starting point in determining a home's value.
The accuracy of the Zestimate varies by location depending on how much information is publicly available, but Zillow allows users to check the accuracy of Zestimates in their own region against actual sales.
In March 2011, Zillow released Rent Zestimates, which provide estimated rent prices for 90 million homes.
On June 14, 2011, Zillow changed its algorithm used to calculate Zestimates. In addition to changing the current Zestimate for millions of homes throughout the country, Zillow changed historical Zestimate value information dating back to 2006.
On June 15, 2021 Zillow reported that it updated how it calculates the Zestimate for off-market homes, so to be more responsive to local trends and seasonality that may affect a homeβs market value and includes even more historical data to improve accuracy.
Critique of Zestimate accuracy
In 2007, ''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' studied the accuracy of Zillow's estimates and found that they "often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible."
In October 2006, the National Community Reinvestment Coalition filed a complaint with the
Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
stating that Zillow was "intentionally misleading consumers and real-estate professionals to rely upon the accuracy of its valuation services despite the full knowledge of the company officials that their valuation Automated Valuation Model (AVM) mechanism is highly inaccurate and misleading." In a letter dated May 4, 2007, the FTC elected not to investigate this complaint, which was later withdrawn by the NCRC.
Using data published on the Zillow website, the typical Zestimate error in the United States in July 2016 was $14,000.
Controversy and lawsuits
While factors contributing to estimates are described elsewhere, Zillow seemingly overemphasises home square footage as the major metric driving property valuation. This method may not be unique to Zillow, but unduly distorts value expectations. Listings in areas where land is priced at high premiums often reflect an identical Zillow estimate to that of nearby homes with comparable interior square footage, but where the home might be decades older. Condition, age of home, special features, and proximity to nuisances are insufficiently factored into the estimate. Zillow has made some effort to add balance by including option for owners to provide their own value estimate, but these figures can be similarly unreliable as being opinion instead of quantifiable.
In 2014, Zillow faced several lawsuits from former employees at the Zillow operation in
Irvine, California
Irvine () is a Planned community, master-planned city in South Orange County, California, United States, in the Los Angeles metropolitan area. The Irvine Company started developing the area in the 1960s and the city was formally incorporated on ...
, alleging violations of
California Labor Code
The California Labor Code, more formally known as "the Labor Code", is a collection of civil law statutes for the State of California. The code is made up of statutes which govern the general obligations and rights of persons within the jurisdic ...
and
California Business and Professions Code
California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...
. On February 26, 2016, the
U.S. District Court for the Central District of California
The United States District Court for the Central District of California (in case citations, C.D. Cal.; commonly referred to as the CDCA or CACD) is a Federal trial court that serves over 19 million people in Southern and Central California, m ...
certified the class to include anyone who worked as an inside sales consultant at Zillow between November 2010 and January 2015. Among the numerous allegations brought by high-profile attorneys
Bobby Samini and
Mark Geragos
Mark John Geragos (born October 5, 1957) is an American criminal defense lawyer and the managing partner of Geragos & Geragos, in Los Angeles.
Early life and education
Geragos was born in Los Angeles, California, where he attended Flintridge Pr ...
, Zillow is accused of failing to pay wages, failing to pay overtime pay, and failing to provide meal and rest breaks. Zillow responded: "the narrative being pushed by this law firm through their multiple lawsuits is completely inconsistent with those who know and work with Zillow...the behavior described does not accurately depict our culture or the 1,200 Zillow employees."
In addition, Samini and Geragos represented a former Zillow employee in a sexual harassment action against the company, alleging "sexual torture"
and "the most heinous acts of sexual harassment imaginable". According to the lawsuit, Zillow's Southern California office represents an "adult frat house where sexual harassment and misconduct are normalized, condoned, and promoted by male managers."
Based on the allegations against the company, Samini has called Zillow a "modern day ''
Animal House
''National Lampoon's Animal House'' is a 1978 American comedy film directed by John Landis and written by Harold Ramis, Douglas Kenney and Chris Miller. It stars John Belushi, Peter Riegert, Tim Matheson, John Vernon, Verna Bloom, Thomas Hu ...
''." On May 5, 2016, Zillow settled the action for an undisclosed amount, without admitting any wrongdoing.
In 2017, Zillow sent a cease-and-desist letter to Kate Wagner, the author of
McMansion Hell
McMansion Hell is a blog that humorously critiques McMansions, large suburban homes typically built from the 1980s to 2008 and known for their stylistic attempt to create the appearance of affluence using mass-produced architecture. The website ...
, a blog that lampooned the presentations of luxury homes found on the site.
Wagner was represented by the
Electronic Frontier Foundation
The Electronic Frontier Foundation (EFF) is an international non-profit digital rights group based in San Francisco, California. The foundation was formed on 10 July 1990 by John Gilmore, John Perry Barlow and Mitch Kapor to promote Internet ci ...
. Zillow later released a statement saying it had "decided against moving forward with legal action" on the matter.
References
External links
*
{{DEFAULTSORT:Zillow
Companies based in Seattle
Online real estate databases
Real estate valuation
American companies established in 2004
Real estate companies established in 2004
Internet properties established in 2006
Companies listed on the Nasdaq
2004 establishments in Washington (state)
2011 initial public offerings
American real estate websites