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Zillow’s New Features: Friend or Foe? Media Company, or Redfin Redux?

Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. ()

April 4th, 2007 · 4 Comments

If by now you haven’t heard the news of Zillow’s new features, you’ve probably been hiding under a rock.  Here’s what’s been reported so far (cribbed from Bloodhound, which has four articles of its own)
TechCrunch, Drew Meyers, Jay Thompson, More from me: A screen-shot tour, Joel Burslem at tFoREM, Robbie Paplin at RCG, Webware, ClickZ, Brian Brady: Farming Zilliow, Brian Brady: Zillow for mortage lenders, Brian Brady: “Ask Questions, Share Answers”, Jonathan Dalton, Ardell at RCG, Zillow Blog, Seattle Post Intelligencer, Reuters, Inman Blog, TechMeme, Marlow Harris at 360Digest, FBS Blog, Jim Duncan at Real Central VA, Greg Sterling at Screenwerk, Realty Baron, VentureBeat.

Though I haven’t been hiding under a rock, I’ve had a frightfully busy day and have only now had a chance to sit down and look over the new features.

There are five key new features:

  1. Home Q&A — users can ask and answer questions about any of the homes in Zillow’s database
  2. Free profiles — for any type of user
  3. Tell us it’s for saleanybody, not just the listing agent or the owner, can identify a home as being for sale; this is undoubtedly the most controversial new feature
  4. Add unlimited photos — again, anybody can add pictures
  5. Zillow EZ ads — self-serve easy-to-use ads; this is key to Zillow chasing the long tail of advertising revenue from the hundreds of thousands of individual agents

We’ll tackle each new feature in a separate post, but for now let’s think about what this all means for the real estate industry.

Some have called me naive, but I’ve long taken Zillow at its word that it’s a media company with real estate content, not (yet another) disintermediation play.  This new feature release provides fodder for both sides of the argument.

Those who are convinced that Zillow is out to Expedia-ize the industry will look at the above — especially feature 3 — and say, “I told you so!  They’re conning us into giving them the listings so that a few months from now they can flip the switch, bring their broker licenses out of cold storage, and begin out-Redfinning Redfin!”  They’ll also say features 1 and 4 are further proof, and that 2 and 5 are simply decoys to make us trust them.

The Bloodhound himself seems to have come over to the “media company” camp, where all the above features provide opportunities for creative web-savvy agents to showcase their knowledge and make themselves as ubiquitous online as many successful agents are offline.

More to come on this interesting news…

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4 responses so far ↓

  • 1 Anonymous // Apr 5, 2007 at 12:38 pm

    I think any realtor/broker ignoring the possibility that Zillow doesn’t have its eye on the prize of intermediation is foolish. Zillow is clearly positioning itself to be both and can turn on the switch when they feel the consumer power on their site is strong enough. It may not necessary operate like RedFin, but there are many different business model variations between serving ads and becoming a broker. A different Internet landscape is evolving and picking up steam. Destination sites are becoming platforms, and platforms have the power of owning distribution networks. Whether it’s facilitating advertising, selling its own services, or taking a piece of the transaction, distribution networks are intermediaries that provide value to both consumers and producers and a force to be recognized.

    Look at what Amazon (early Web 2.0 champion) is doing. What Yahoo is doing. The killer stories in the past few years are new Internet distribution networks enabled by broadband adoption, Internet user experiences (AJAX and open source) and shift in American culture (spearheaded by Gen Y) to actively participate in Internet communities. All killer Internet stories are *new* distribution networks.

    The old distribution network in Real Estate is indeed changing, and there’s no going back. Think of these new Internet supergiants in RE like Zillow and Trulia as new distrubtion networks, not new destination sites. And to think that distribution networks will only do advertising is naive. In real estate, the lion share is in the transaction and the services around it, and there’s no reason to abstain. Zillow won’t replace realtors and brokers, but I find it extremely naive to think they are not aiming to take a significant piece of the transaction.

  • 2 Kevin Boer, Realtor, 3 Oceans Real Estate // Apr 5, 2007 at 1:13 pm

    Hi Anonymous,

    It may be an issue of semantics, and perhaps I’ve been too black-and-white in my thinking. When I think of Zillow disintermediating the industry I think of them literally becoming brokers themselves, and you’re right that there are any number of options between serving up advertising and doing the actual brokerage itself.

    For instance, if Zillow gets enough consumer clout on its site, it could perhaps charge agents for the privilege of adding content.

  • 3 MLS-2.com // Apr 6, 2007 at 1:03 pm

    Bloodhoud may have come over to the media camp, but Greg is keeping an eye on the other when he wrote:

    “This last round of revisions — adding many new pages and vast new capacity — took four months. If this advertising play does not pay off, could it (Zillow) turn itself into a national semi-automated real estate brokerage? You bet. In six months at the outside.”

    flipping a switch in only 6 months will leave precious little time for most current participants to retool. So, as we say in sunny California, “have your earthquake kit ready” (even though no on does)!

  • 4 John Lockwood // Apr 8, 2007 at 1:53 pm

    Hiding under a rock, or neglecting to read any articles about it…

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