Zillow 3 Real Estate 0

While Real Estate is suffering through its Sub-Prime Meltdown and Move.com and Realogy are still trying to get away from their Home Store and Cendant scandal pasts, Zillow was busy getting its third round of Venture Capital (VC) funding.

Legg Mason Capital Management, PAR Capital Management, Benchmark Capital and Technology Crossover Ventures voted with their dollars to give Zillow a kick in the wallet, funding Zillow's third round for $30 Million, giving "The Little Real Estate Search Engine That Could" a grand total of $87 Million in VC gold.

Zillow, only 19 months old, went from a second-round market valuation of $250 Million to an estimated $350 Million third round valuation. Interestingly, Richard Barton, whose company gives other people's home valuations, declined to comment on Zillow's most recent valuation.

This third round funding brings Zillow another step closer to becoming "The Expedia of Real Estate", on their way to becoming "The Google of Real Estate".

In his comments to the WSJ, Richard Barton didn't say he was going to add more Sales Agents and take more online Real Estate Courses with the Top Ten Tips for everything Real Estate. To the relief of all Brokers, for some reason, Mr Barton is sticking to online ad sales, and focusing on a localized advertising program at that. Maybe Zillow can succeed where the big boys (Google, Yahoo and MSN not RE/MAX, Century 21 and Coldwell Banker) have failed (so far).

With Zillow, Google Base (they have the greater majority of the top 100 US RE Brokers submitting their listing data) and Yahoo Real Estate (aggregating Zillow, Reply.com and Eppraisal value estimates) offering their services for free (paid for by ad revenue), can Realtor.com with their expensive subscription service model be long for this world? You can still get an AVM home value estimate from Domania.com for $29.95 (No Agent will call, and "free" with "An Experienced Agent Will Call You").

In further comments, Richard Barton said he's not only going after your CMA's (Zillow does them in about 6 seconds) and your ad budget (you can now buy ads on Zillow by Zip Code, just like Realtor.com), but also after your Concierge Service, offering a localized ad program to businesses such as plumbers, architects and renegade real-estate agents, delivering targeted ads to people searching for home information within specific Zip Codes. And just when you paid for a seminar telling you to set up a concierge service and tap your affiliates' ad budgets to help pay for your ads.

Maybe the real money in Real Estate isn't in selling houses anymore?

Adapt Or Die!  Happy Searching.

WebHomeUSAblog; The Blog of Real Estate Search Marketing

Comments

[Scott Shamrock]

It is all about perception. Being a Realtor and Appraiser Assistant I take any Zestimate with a grain of salt. Zillow is doing a good job of getting the public to equate Zestimates with CMA's. The problem is that the majority of the public does not have enough knowledge to understand that it is an inexact science. I applaud the marketing efforts of Zillow though.

[Kelley]

$87 million in 18 months is quite impressive.

[Marie]

I agree with Scott, most professionals do know to take the scores with a grain of salt. Its just a pain in trying to explain to the consumer why the zillow estimate isn't right. On a side note, I dont know why real estate agents would help zillow, they are the "The Expedia of Real Estate" which means they put travel agents out of business and are trying to do the same with real estate agents. All I have to say is NO THANK YOU. I'll put my money elsewhere.

[Kenneth]

Marie,
I totally agree with you, I'm a real estate agent and I am always telling my friends and co-workers not to use zillow. I actually recommend a company called HouseFront (www.housefront.com), they are a tool for agents, they offer MLS listings and forward people on to use real estate agents when looking for a home. Just my two cents though.

[Free and Clear]

Different processes for home evaluation are used to determine the prices with respect to diverse locations and featured benefits.