Zillow view from Wall Street
Posted by Pat Kitano at 12/13/2006 11:48 PM 
Categories: Technology, New Business Models, Realty Realities, The Future
Categories: Technology, New Business Models, Realty Realities, The Future
Patrick Boyle of MLS-2 visited with Kevin, Travis and me today and turned us on to a Wall Street spin on Zillow... Wall Street prides itself in seeing through artifice. I haven't seen it reviewed in the real estate blogs, but former Wall Street analyst David Jackson's article at Seeking Alpha - Zillow to Realtors: Really, We're Not Going to Eat Your Lunch - keenly reflects Realtors' suspicions that Zillow is pulling a fast one (note Larry's Zillow Zorro post).
Here are the two main points:
"Otherwise smart commentators have swallowed the company's PR hook, line and sinker." - citing two well know tech bloggers who buy into Zillow's avowed advertising model... the message - techies see Zillow as a tech company, Realtors see Zillow as a real estate company.
"But the realtors themselves aren't that stupid. They know a threat when they see one." - Jackson explains that every feature of Zillow - homeowner interaction with the site, real estate wiki - are all about educating the consumer... which is admirable but it still weans the consumer from their reliance on the Realtor.
Realtors wonder aloud when Zillow turns on the "transaction fee switch"... Will Realtors pull their listings en masse when the traitorous switch is pulled? Will Zillow's ad model be so established that the switch will cause only a "blip" revolt because the consumer traffic may be so compelling to the Realtors? Zillow can be patient, they have to be because the real estate industry moves sooo slow. My thoughts? I don't think the switch will be pulled until Zillow is acquired, thus giving the new owner freedom to pull it.
Technorati Tags: Zillow, real estate valuation, MLS-2, realtor
I suspect the hope is that Google buys Zillow. In that case I'm fairly sure that Zillow will be intended to remain free.
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I may have drunk too much Zillow Koolaid, but I still take them at their word about being a media company that sells ads. It's a very lucrative niche, one they have a good chance of succeeding in; the whole disintermediation thing is a lot more difficult to pull of than most technologists -- and most Realtors -- realize.
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It's inevitable...the day will come when the marketing piece of real estate will be done strictly on the web and by companies who provide the medium and technology to do it well.
What most don't realize is that there will always be a need for good agents because the marketing piece will not be able to prepare the offer, negotiate the terms, negotiate home inspection items, attend settlement, etc.
If I could sub-out the marketing piece and just write offers, negotiate and attend settlements, I'd be thrilled!
As for Zillow...I personally think they're up to something that they're not telling anyone about!
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To Kevin
See David G's comment on FOREM (Future of Real Estate Marketing) where he says "For Sale content was always a part of the plan. … this move should have been predictable"
http://tinyurl.com/sjwjm
They have acquired licenses in several (unnamed) states. What is predicatable from that?
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