Chief Executive Rich Barton described the feature as the tip of the iceberg and he’s so right – there’s a lot more happening here than a neighborhood discussion forum.
The top line is that people can pose and answer questions about homes and neighborhoods, providing a resource to home buyers, but it seems like this is really about building a sticky community site.
To participate in the discussions, users have to register and create profiles. Most of the profiles and discussions are likely to involve people actively selling homes or in the business.
Just as significant to the company, Zillow’s busting a move into Google-style, self-serve, locally targeted box ads. These will run down the side of the page and probably be used mostly by realty firms, mortgage brokers and building service providers. The company will also continue to run larger, higher- cost ads.
I’m guessing the ads, profiles and discussion forums could thaw the chilly relationship the real estate industry has with Zillow. Most of the new features unveiled today can be seen as tools that agents could use to promote their listings and engage with potential buyers.
But Zillow and others Web companies are still changing the game by giving buyers better tools to find and research properties and neighborhoods. Zillow’s also giving homeowners the ability to directly “list” their homes by tagging them as for sale, whether or not they’re working with agents and the trade’s Multiple Listing Service.
The ones who ought to get their hackles up now are newspaper publishers. Not only is Zillow trying to become a source of really local news and information, the EZ Ads are going after one of newspapers’ last strongholds in classified advertising.
Papers are expanding online ad opportunities as well, and a coalition of large publishers is now running one of the top online real estate sites, HomeGain.com. Yet Zillow’s engineering and design talent really shows on the “EZ Ads” ad placement console the company is unveiling today.
Barton and Zillow President Lloyd Frink briefed me on the new features.
One of my questions was whether Zillow would end up getting subpoenas, if someone takes issue with a home seller’s disclosure report and sees that additional information has been disclosed in Zillow’s Q&As. Barton said that’s not a concern:
“This doesn’t affect that process because those disclosures are being made in the normal real estate process … there are professionals involved in those things. This is kind of additive information.”
Opening up the site to community input may also help Zillow address one of its weak spots, the accuracy and credibility of its cornerstone Zestimate property valuations. The responsibility for providing accurate details of a home is now spread between Zillow, homeowners, listing agents and “the community.”
On one hand that will give a richer picture than the Zestimates’ blend of algorithms and public records. But I wonder if there’s a risk that Zestimates – the site’s secret sauce – will be overpowered by the discussions and user inputs. They may do a great job with forums, ads and a niche social network focused on real estate, but those thing aren’t unique.
Barton said there are still more opportunities for Zillow to bring online the offline real estate experience:
“There’s a pinata and it’s full of great candy. We’re taking swings at that pinata. We’ve kind of hit the leg a little bit and a couple pieces of candy have dropped out, but we think there are a lot of interesting swings that we can take to break open, expose, all of this information, all of these conversations.”
The company raised $57 million and doesn’t need more at this point, Barton said. It employs 135, mostly engineers, and is adding about 15 to 20 positions.
What will Zillow look like in five years? Barton’s answer:
“Our bet is this really vibrant bazaar – it’s a place where everybody who is interested in homes and real estate can come to get really smart and get their questions answered – it’s just a community, a forum.”