DISQUS

onlinerealestateguru · 2 years ago

Good analysis VB. Legg was clearly an example of dumb money that was willing to pay up to get in on a perceived hot private deal. Coulda been a hedge fund from the Middle East as the likely alternative.

If your traffic figures are correct, then Zillow is in trouble. They are trying to be a media ad sales player and the last time I checked you needed to have impressions to pull that off.

Also great point on CPC vs subscription. Realtors are too dumb to do the math with a CPC model which is ultimately why this market stinks.

Some big yellow pages company will someday put these guys out of their misery becuase the one thing you haven't called out is how do you actually sell to and service all these agents.

David G from Zillow.com · 2 years ago

Hi Doug, it's David from Zillow,

FYI - Zillow makes its money by selling advertising. Our self service advertising product for Zip-code targeted ads is actually a CPM model. CPC doesn't suit many local advertisers who don't have great websites and just want their phones to ring. Most of the rest of the ads on Zillow are also CPM, though we're open to advertisers' suggestions for CPA and even CPC ads. It is however free for real estate agents and brokers to advertise their listings on Zillow. In the context of this news, it's important to note that real estate agents using Zillow, associate with and promote their listings on the site for free.

Regarding traffic - the hitwise stats should have tipped you off that Quantcast's numbers are horribly wrong. Traffic to Zillow is in fact up 20% YOY and about 4 million people use the site each month.

As you know, you have an appointment to talk with Zillow's ad exec's this morning. I hope that call provides you with some more clarity regarding our ad products. It would be GREAT if you updated your post with what you learn.

David G from Zillow.com · 2 years ago

Hi Doug, it’s David again,

I just caught your comment about Zillow Discussions. You seem to have totally missed this: http://www.zillow.com/forum/site/Index.htm. This is an extremely vibrant real estate forum with arguably more consumer participation than any other real estate community on the web. Please update your post with a link to Zillow Discussions.

I'm frankly surprised you found the Seattle Discussions. Local pages on Zillow are in a very early phase and we're intentionally not sending much traffic there. Expect more action in this area over the coming months.

Spencer Rascoff · 2 years ago

Spencer from Zillow here.

The fact that Comscore, Hitwise and Quantcast are consistently wrong has been well-reported by many respected news organizations. See for example this recent article in the New York Times: http://www.nytimes.com/2007/10/22/technology/22...

We pay Omniture a fortune to track our traffic internally, and as DavidG said above we're very pleased to see such sizable traffic gains (+20% y-o-y) despite the overall online real estate category being down significantly. Thank you for updating the story with the correct data.

Also, you wrote: "In the meantime, Zillow is throwing money at hiring engineers, though its [sic] not certain why. Zillow has 155 employees, and 108 of them are technical workers, of which 30 are developers."
Where did you get these numbers from? The statement that "30 are developers" is incorrect. And to say "its [sic] not certain why" is ridiculous. The reason why is that we're a media company and we rely on our talented development staff to build exciting products that attract consumers and then advertisers. It's basically the same reason why news organizations hire reporters -- to produce content that attracts readers and advertisers. That's why.

Matt Marshall · 2 years ago

David, we've updated the account for CPMs.

Spencer Rascoff · 2 years ago

Spencer from Zillow (again) --
I want to clarify the comment on our technical staffing. We do have over 100 technical employees out of the 155 total. The vast majority of those technical people are software developers. Our apologies for any misunderstanding there.

David G from Zillow.com · 2 years ago

Thanks Matt.

Sramana Mitra · 2 years ago

Matt,

I had raised questions about Zillow's business model not being commensurate with the amount of money it has raised earlier.
http://sramanamitra.com/2007/07/11/ziprealtyzil...

Sramana

Doug Sherrets · 2 years ago

Spencer, thank you for commenting. As we covered on our phone call, the numbers stated in the original post for total employees, technical workers and developers came directly from an email from Zillow PR in response to my questions. The post is now updated to reflect your count of developers.

Thanks,
Doug

Ray Burt · 2 years ago

Lots more discussion on this topic at http://blog.seattlepi.nwsource.com/venture/arch...

Jay Haus · 2 years ago

Legg has made mistakes before. Zillow's competitors advertise their venues on TVSellsRealEstate.com. With a month-long national TV ad campaign of as little as $3K (including the production of the ad), that can't be beat. If Zillow incorporated some of these Cheap TV Spots into their model they might have a unique angle on their market, too. Featured listings can be accompanied by TV ads, down to a specific zone, right to a single zip code if required.

Bobby · 2 years ago

Are there estimates for Zillow's revenues?

The fact that Legg Mason is over paying to get into these deals is very scary for existing Zillow shareholders - UNLESS, they don't take anymore money from VC's. I smell a MAJOR down round on valuation coming unless they start controlling expenses. There is no way that the revenue is ramping at a level to offset expenses in the near term. Please notify me when the first round of pink slips goes out to Zillow employees this Holiday season (or early part of '08).

Andy · 2 years ago

So all of the independent metrics say that Zillow has less than 2 million UVs, and they claim more than twice that amount.

Not that Zillow necessarily has to justify this claim, but without some independent measure it seems a bit hollow. On this basis, realtor.com could just say that they have 12 million, because the "measured it internally". This is important because the variations that apply to one site are very likely to apply to other similar sites; and the relative size is important to advertisers looking for the "best" vehicle.

If it isn't both independent *and* independently verifiable, it is fair to question these claims -- especially since they are so far out of whack with everyone's metrics. This could be that they are simply siting "Visits" as "People", which looks about right against the numbers.

Spencer/David: This isn't a dig at you or the business - so please don't interpret it as such. It is just that accepted practice among "media companies" (which is what Zillow calls itself, and what it in fact is when it asks advertisers to pay) is to site independently verifiable statistics. NBC can't simply claim to "dominate Monday night TV" because they disagree with Nielsen. No one remembers the score, they remember the ranking.

I say, put up some verifiable facts or site the independent numbers. When websites refuse to do so it raises the potential for deceptive claims of advertising reach. I am certainly not saying that Zillow is being deceptive, but if there is "no truth", others will be.