Realtor.com Coming For Zillow After Posting 30% Revenue Gain

November 5, 2021
Share this Post: 

Zillow's oldest rival Realtor.com looks set to make life even more difficult for the Seattle based company as it posted some impressive numbers in its parent company's latest quarterly results.

News Corp, part of the Murdoch family empire of businesses, owns both Australian market leading portal operator REA Group as well as Move Inc, the parent company of American #2 portal Realtor.com which it acquired in 2014.

News Corp's digital real estate segment was a major driver of the firm's return to profitability with previous quarters having suffered the effects of the pandemic. News Corp posted $2.5 billion in revenue with digital real estate accounting for $426 million of it.

Digital real estate services (which includes REA Group and Realtor.com parent Move Inc) generated the lowest revenue of the five News Corp segments but was easily the most profitable - EBITDA for the whole company was $410 million with digital real estate accounting for $138 million.

Although not quite as spectacular as the results at REA Group, the revenue at Move Inc was up by 30% to $180 million. Both the lead gen model and the referral model, which the company adopted in August 2020, saw growth with the referral modal now representing around 32% of Move's quarterly revenue.

In terms of operational metrics, Lead volume declined 18%, reflecting a tough comparison to the prior year as well as a seasonal shift in home buying. Traffic numbers were up 7% on the previous comparable period at 97 million users across web and mobile with Move CEO David Doctorow highlighting the traffic gains being made on Zillow in a blog piece published yesterday:

"According to data from Comscore, we continued to grow audience faster than our closest competition in FY22 Q1, as we did for every month in FY21."

Sticking the knife into Zillow a bit further after its iBuying retreat, Doctorow added:

"We’re using technology to encourage collaboration among industry stakeholders – it’s part of our open marketplace approach. We don’t buy and sell homes – we help people buy and sell homes. Recent events in the industry have only underscored the value of that approach."

Zillow bashing was also a theme of News Corp's earnings call, with News Corp CEO Robert Thomson commenting on Zillow's iBuying misadventure:

"As for the house flipping -- flip flop by Zillow, we have always been focused on the digital market, not on bricks and mortar, and certainly not on sorting out the septic tank or papering over wall cracks. We concentrated on our core competency and never took on excessive balance sheet risk or chased what appeared to us to be very low margin returns."

"It appears Zillow finally understands what we always knew to be true. That said, as an open platform, we do see opportunities to be a marketplace for the industry, including iBuyer, such as Opendoor, providing them with the same kind of dependable and trusted information that agents and consumers alike have valued."

Thomson did admit that News Corp had considered getting into housing transactions but ultimately decided that the priority was the digital market:

"...we had discussed ourselves getting into bricks and mortar, but we had a very clear sense of the digital priorities. Don't forget that we had revived, renovated the distinctly unfashionable realtor.com. We bought it on the cheap, net-net, about $700 million. What's it worth now? $6 billion, $7 billion. What will it be worth in five years as the inevitable digital march continues? $15 billion, $20 billion, more. So we've been very focused diligently so to service for vendors, buyers, and realtors."

"As for Zillow, look, the idea that it was simple to find a great plasterer, planner or planter, plus a plant or a planter; the idea that prices were not variable, subject to vicissitudes; the idea that holding inventory was not itself costly, to me, those were rather strange ideas. I'm not sure what impact eventually when Zillow makes up its mind what type of business it is, they will have on the market, but I can talk from a macro perspective."

Clearly with the feisty tone and the numbers to back it up, Move Inc and Realtor.com are serious about taking on Zillow's market leadership and on capitalising on agent dissatisfaction with Zillow's perceived disintermediation.

With CoStar also now very active in the US residential space with its purchase of Homesnap and its development of Homes.com (which it expects to be a direct rival of Zillow by late 2022), the development of the United States real estate market will be interesting for some time to come.

November 5, 2021
Edmund got to know the world of portals and marketplaces working at Mitula Group (which became Lifull Connect after the buyout in 2018). He worked directly with hundreds of portals across the world in his role in the content department for three and a half years before transferring to the SEO department to understand the inner workings of listings sites. He joined Online Marketplaces as Head of Content in March 2020.

Subscribe to our mailing list to get news updates!

Enter your email address and get updates from Online Marketplaces.

Related News

Fotocasa
Fotocasa Debuts New Portal for Investors

Spanish property portal Fotocasa has launched a new information product aimed at real estate investors. It claims to be the...

Read More
Rea Group
REA Group Reports 'Impressive" Growth

REA Group has today reported strong results for the three months ending September 30, 2021, despite lockdowns in some of...

Read More
Singapore
Portals, Agencies Join Forces to Tackle Fake Listings

Two of Singapore’s leading property portals, along with leading real estate agencies will join forces to eliminate dummy and duplicate...

Read More
Homesnap Twin Houses
Your Listing, Your Lead: Homesnap’s Product SVP Shows Us The Tools CoStar Bought to Take on Zillow in Residential

There has been a lot of controversy in the American real estate marketing sector recently over the alleged incursion of...

Read More

Popular News