Where Real Estate Gets Its Dirt

Zillow’s stock price takes a beating after Citron Research report.

Zillow’s stock at one point today had lost 10% of its value on the heels of a new report by Citron Research, labeled “Citron Presents the Most Comprehensive and Thoughtful Piece on Zillow Ever Published. This is why this stock is going to $80 … then $50 … then right back to where it started the year … $30 per share.”

The report paints a dismal future for Zillow, and raise question about its overall business model. I recommend you guys to go read it. Here’s a few highlights…

Zillow spent 32.9 million on marketing last quarter (Q2 2013), they spent 19.8 million in Q1.

They spent 33 million dollars marketing to real estate agents.

Is that number as shocking to you as it is to me?

Zillow accounts for only 13.5% of all real estate web traffic

When you put it as black and white as that it does seem paltry.

And then there’s this…

“No one on Wall Street has ever been able to rattle off the case for his company more eloquently and rapidly than CEO Rascoff. He reminds us that there is a potential $6 billion “revenue pie” – the money realtors spend on advertising – and Zillow now garners only a smidgen of that. Think of the potential!
Even though the Zillow CEO talks about the huge percentage of total Real Estate marketing that Zillow doesn’t attract, there is so much wrong with this thinking. To expose this, ask yourself “what happened to all of the spending on classified ads, music, and travel agents?” Sometimes the internet just makes money flows disappear, and not transfer to a new collector.”


There’s a mention of Bob Bemis‘s abrupt departure. And a video of a CMLS “Brings It To The Table” event. (Do you recognize the guy standing in front of the screen?

And a review a former Zillow employee gave them on Glassdoor.com (oh the irony). Here’s an excerpt.

“11-12 hours days with lunch breaks severely frowned upon. Basically, if you take lunch, it’s nearly impossible to hit your “call time” of 210 min per day- That’s time spent TALKING on the phone- not counting dialing, ringing, etc. Can you say micromanagement??”

What did he expect working in a call center?

I dunno, I think the report is a bit too doom and gloom. Zillow has captured the public and industry’s attention. Who knows what the future will bring.

  1. Because you keep trying to automate a business that requires patience insight and hand holding. People are afraid to go to traffic court on their own and we keep trying to sell people house online.

    They may find that local realtor, or maybe the neighbourhood, but shopping for a house needs someone to provide context and encourage making a decision.

    David Pylyp
    Homes west Toronto, Canada

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