Connect with us

Real Estate Corporate

Zillow CEO gives you hints during media appearances

Zillow and Trulia are getting hitched, and Spencer Rascoff is leaving a trail of breadcrumbs with the new playbook, as he makes media appearances and statements across the nation.



zillow spencer rascoff

Zillow’s second quarter earnings report reveals a loss per share of $0.05 (more than expected) with revenue hitting $78.7M (also higher than expected). The company raised their full-year revenue outlook to $321-$323M, up from the previous view of $304-$308M. This is the first earnings report released since the announcement that they intend on acquiring competitor,

Zillow CEO, Spencer Rascoff, is an engaging personality who makes the rounds of cable news from time to time, most recently catching our attention with his appearance on Mad Money’s Jim Cramer on CNBC. The full transcript is below, and we’ve italicized the points Rascoff smoothly makes that should tip you off as to the Zillow playbook, so pay attention...

Full transcript:

Jim Cramer: all right. Zillow shares trading slightly lower — couple bucks, come on, after reporting mixed quarter results — well, mixed if you’re a nitpicker. Real estate marketplace is really on fire right now. One of the things that is happening is that they are merging with Trulia. I can’t believe how lucky we are to have Mr. Spencer Rascoff here. We often talk about how he’s here in spirit a great deal. Spencer, when I interviewed you in the spring, I said, come on, if you can’t beat them, join them, go buy Trulia. You said, we’re going to beat them. What changed?

Spencer Rascoff: Well, ask and you shall receive, Jim. You asked me many, many times why don’t you buy Trulia, why don’t you buy Trulia? And we now intend to buy Trulia. I think the combination of the companies provides a lot of benefits for employees, and shareholders, and industry participants. There’s no question that there are a lot of cost savings from the two companies combining, and there will be revenue synergies, and so I’m super excited about the transaction.

Jim Cramer: One of the things I’m concerned about, you have a lot of people signed up, really amazing. Could you run out of inventory to sell?

Spencer Rascoff: We have around 57,000 subscribing real estate agents that buy local advertising from us, but our traffic continues to grow so quickly. We had 89 million unique users last month. So as traffic grows, there are more impressions available to sell. We have lots of impressions available for our agent advertisers.

Jim Cramer: A lot of people at home are saying, wait a second, we see home sales are slowing, we see mortgage numbers, and you do a preapproved mortgage. In reality, you’re not levered to that.

Spencer Rascoff: no, what’s happening is the consumer is rapidly changing their behavior from shopping for real estate in the newspaper classifieds to the internet and increasingly not even the internet on a desktop machine, but actually to a mobile device. That migration is swamping any macro headwinds. Housing is slowing somewhat, but the user is shifting so quickly to the internet that we’re benefiting from that.

Carlos Quintanilla: People are looking at visitor growth, desktop decelerating. Is mobile making up for that desktop deceleration?

Spencer Rascoff: more than making up for it. We’re now over 200 homes a second on mobile, and when I was on your show three years ago at the IPO, just three years ago, it was 20 homes a second. In three years, that’s 10x the mobile growth in three years’ time. It’s astounding what’s happening with the mobile devices.

Jim Cramer: One of the things I thought was most interesting, I’m from summit, New Jersey, and you did a special call out about a broker, and I just want you to walk people through. This is a precipiting broker which usually means Realogy to me — I probably know the broker personally, but you talked about the number of leads that is generated with $ 5,000 a month, and how many lead conversions. I want people to understand why the brokers initially reluctant to use Zillow are now all in.

Spencer Rascoff: agents who advertise with Zillow, they spend money with us and they make a lot of money. I think you’re referring to an agent I tweeted about yesterday, who I met at one of our Zillow Summits, which is these local events where we meet hundreds of agent advertisers, and this agent was just telling me, he was thanking me for how much money we’ve helped him make. And when he gets a Zillow lead, he follows up on it incredibly quickly and he usually converts that lead into a transaction and he makes a lot of money. that’s why our ARPA, average revenue per agent is growing so quickly, it’s now over $300, is what the typical agent is advertising a month.

Jim Cramer: But you know, yelp had good ARPA basically, but they didn’t sign on enough new agents. You also didn’t sign on as many agents as some thought. How come you’re getting a pass on that?

Spencer Rascoff: Well because I think our revenue is growing so quickly. The premier agent revenue growth is up 82% year over year, that’s the fourth quarter in a row of accelerating agent advertising revenue. So you’re right. We are focusing more on a smaller number of top producing agents who are willing to spend more because they value our audience more, and that means we are we bringing on fewer total subscribers and fewer total advertisers, but at a higher rate. I’ll take that tradeoff, and the tradeoff is working, clearly, total revenue from agent advertising continues to grow, with the law of good numbers, it’s harder to continue to increase your growth rate as your numbers get bigger, but we’re finding a way to do it on agent advertising.

Carlos Quintanilla: Here’s a macro question. Journal does a piece this week on Oklahoma City. People moving there because they are being priced out of the coasts. Somebody wrote this week that the millennial story will be moving not because a job is better in another city, but because the houses are cheaper. Do you think that both of those things are true?

Spencer Rascoff: well, it is true, but there’s an anchor around American homeowners which is negative equity. Still around 20% of all Americans with a mortgage are upside down on their loan. And so there may be a job in some fracking state like North Dakota or Oklahoma, but if they are underwater at their house in New Jersey because they bought in 2006, it doesn’t matter if there’s some better job elsewhere, they can’t sell. That’s what keeps job ability lower than we’d all like.

Jim Cramer: this preapproved mortgage, people felt that was just dying on the vine, but the numbers there, you revealed that program when you were on the show last time.

Spencer Rascoff: That’s right.

Jim Cramer: how can that be going up in this environment?

Spencer Rascoff: we created the product which is the only place on line now where you get preapproved for a mortgage. The normal preapproval experience is a pretty painful experience; and now online on Zillow Mortgages you can actually get preapproved and have a letter that you can then go and look at houses with. That’s a big deal.

Jim Cramer: I imagine that Trulia, a lot of these things you’ve put through, for StreetEasy New York, for preapproval, Trulia, and you don’t need all that spend, that ad spend that Trulia’s doing.

Spencer Rascoff: Look, you told me years ago, buy street easy, and we did. Then you said buy Trulia, so what’s should we buy next?

Jim Cramer: I’ll get to you later, but it doesn’t matter, because aren’t you cohosting the 10 and 11?

Spencer Rascoff: you’re cheaper than an M&A investment banker, and your deal flow is better, so you let me know.

Jim Cramer: oh, spencer, thank you. People say Jim, why aren’t you harder on him? Here’s the way we work – stock was at 20, stock’s at 140, I save it for the guys whose stock went from 140 to 20. Spencer Rascoff, thank you.

Spencer Rascoff: Thank you.

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Real Estate Corporate

Zillow’s patent game is strong – they just got 3 for IBM’s creations

(CORPORATE NEWS) This company was just granted not 1 patent but 3 on tech more than twice their age! What does it mean for you? Nothing good…



zillow genius patent

Welp. They did it.

We’ve been watching Zillow for some time now, and in the midst of even the strongest of OP Eds saying how terrible an idea it is, Uncle Sam officially handed them multiple patent keys to tech they didn’t invent.

How big do you have to be before you can clout jack with this much impunity?

I’m used to seeing this with small artists. Forever21’s Etsy spies find a cute, simple design, maybe do the work to alter the pallate a smidgen and rely on the ‘Matilda’s Dad’ strategy of “I’m smart, you’re dumb, I’m big, you’re little, I’m right, you’re wrong, and our lawyers will argue the same, peasant’.

But with technology, you can literally trace the code back to a source. It’s not like using teeth as a motif, it’s real, it’s definite, and it’s definitely really shocking that the government signed off on this.

Zillow’s not exactly startup sized, they’ve been in business since 2004. They’re a big name. Their competition probably can’t muscle their way in and out like they can. Matter fact, a company you may have heard of fighting them on patents has only been doing their doings since…wait, since 1911. Must be a tiny outfit, that was in some other business for over a century right?

It’s IBM.

What le freaque?

We all need to be concerned about this level of government sanctioned patent jacking, no matter what field we’re in.

I’ve heard before that if you’re just starting out, and low on funds, paying for your inventory and manpower are more important than filing anything with the government. Now we’ve got fresh, bloody proof that that’s 100% not true.

Your or your company’s intellectual property can be deeded off with a factor no more elaborate than whether the patent office likes your face that day, regardless of what kind of trail you’ve left, and as far as being run into the ground or laid off goes, that’s hardly a non-factor.

This decision represents a higher financial barrier to entry for everyone from Amazon entrepreneurs to realtors daring to use tech as basic as texting in their business.

Yes, literally.

Zillow’s patents, condensed for readability, are on:

Taking panoramic images for 3D walkthroughs

Multi-criteria search engines

And superimposing images scaled for size onto an area of land

Do all of those sound familiar? They should. We’ve been using that tech for years. And Zillow’s no Microsoft.

As always, we’ll have to see how this plays out. But if your New Year’s resolution was to take more bold steps in your business, maybe see if you can patent the idea of putting your picture in your email signature?

Apparently it couldn’t hurt.

Continue Reading

Real Estate Corporate

Conductor buys their company back from WeWork (that’s a good thing)

(CORPORATE NEWS) In an effort to refocus, co-working giant, WeWork, is looking to offload many of its recently purchased assets which may work in the small companies favor.



wework office space

Once upon a time, WeWork, the popular, ever growing, co-working space giant, was valued at $47 Billion. But on August 14th, 2019, everything changed.

In August, WeWork submitted its first IPO paperwork for the company, not realizing it would almost immediately face incredible scrutiny from various entities, such as investors and the press, in regards to its finances. Although the company’s revenue doubled in 2018, Business Insider found that the company wasn’t actually earning any profit. In fact, reporter Rebecca Aydin reported on July 3rd that the company was losing $216, 000 every hour of every day.

But that’s not all. Since WeWork went public, the company has witnessed an incredible devaluation, from $47 billion, all the way down to $8 billion. Now, since we’re talking about billions of dollars here, the devaluation may not seem like a big deal for the future of the company, but I can assure you it is.

This devaluation resulted in Softbank, WeWorks’ biggest investor, taking over, and offering $1.6 billion to then CEO, Adam Neumann, in exchange for stepping down.

Throughout their growth, WeWork acquired more than 20 businesses, such as Spacious, a small co-working space in Manhattan, New York. Spacious’ CEO prior to the acquisition was Preston Pesek, who launched the firm in 2016. Pesek had a background in real estate and founded the business to leverage and monetize abandoned buildings and restaurants.

Customers had easy access to these spaces for a nominal fee, but because of WeWork’s recent decisions with finances, it made the decision to offload quite a few of its previously acquired businesses, including Spacious. They’re also looking to liquidate Managed By Q, which was purchased by WeWork from founder, Dan Teran in April.

In light of this news, Pesek anounced that Spacious will close its doors at the end of the year, alluding to WeWork’s refocus on its core workspace business. But while Spacious is set to close, Teran has decided to fight to re-acquire his company. In a article on The Real Deal, writer Rich Bockmann states that Teran said he’s actively looking to buy back his company.

Conductor, another company WeWork purchased more than 2 years ago, has already been successful in purchasing its company back, and it looks like it may be a better setup for its employees than previously. Co-Founder, Seth Besmertnik, stated in an interview that, prior to the sale of Conductor, he actually only owned 10% of the company. But with the re-acquisition of the company, Besmertnik and his partners, investors, and employees will be in full control. He says that under the company’s restructuring, employees will have “more than four times what they did when we sold the company”, which is clearly a better deal than what they had before.

But WeWork isn’t just liquidating co-working assets they’ve acquired. They’ve also laid off 2,400 employees in an effort to cut costs. Additionally, they’re also considering selling and/or shutting down other ventures, such as, a web platform that makes meeting up with like-minded individuals as easy as possible (purchased in 2017 for $156 Million). WeGrow, an elementary school in Manhattan, is also on the chopping block.

At the end of the day, WeWork just wasn’t as strong as users, investors, business partners, and the general public thought they would be. At a current valuation of only $8 billion (again, down from $47 billion), and with a $9.5 billion bailout from Softbank, the company will have to get really smart with their remaining finances. It’s obvious that the company is still in a state of flux, reevaluating their options and their main focus, but the question remains – can they still be saved? Maybe even more importantly, are they worth being saved? Only time will tell.

Continue Reading

Real Estate Corporate

Redfin launches their Job Opportunity tool – gimmicky yet brilliant move

(REAL ESTATE) Redfin has launched a new tool that at first glance is a PR stunt, but at second glance is useful and pretty damn smart.



redfin job opportunity score

According to the National Association of Realtors, 90% of people searching for new homes will turn to the internet in their hunt. It’s why real estate sites like Zillow, Trulia and Redfin exist. With competition growing tighter every year, Redfin has created a new feature to stand out from the rest of the pack: a job opportunity tool.

No, this isn’t specifically for job hunting. You’re going to have to look for specific employment opportunities elsewhere.

Instead, Redfin has collected information from sources like the Bureau of Labor Statistics, the US Census Bureau, and even the IRS in order to provide an informed look into the job climate for those looking to relocate.

Not only can users get an idea of how many jobs are available in an area, they can take a look at median salaries, and how these salaries add up against the cost of living.

Redfin’s tool calculates average housing, transportation, and tax prices, among other things, which can give people an idea of how far their salary will really go in a new home.

Plus, they’ve also created a tab for employers to research data regarding hiring prospects, expanding usage of the tool to those considering starting, expanding or moving a business.

On its own, the job opportunity tool is pretty neat. There are plenty of colorful visuals to make the information engaging and easy to digest. The tool also boasts a decent amount of variety, providing insight about jobs from bakers, floor sanders, midwives, and anything in between. It’s sure to provide interesting insights to anyone looking to relocate.

Primarily, it’s a smart business move on Redfin’s part.

The tool sets them apart from other real estate sites, giving them a traffic and brand boost with the markets they were already targeting. Many people looking to buy homes are, after all, making significant relocations. It also diversifies what Redfin offers, though, which might help them garner attention from other industries and break out of real estate in a creative way.

Above all, it’s a smart PR move for Redfin, to creatively present their data to news outlets and have their name in as many media mouths as possible.

Online real estate is still a budding industry despite being two decades old, and this is just one of many ways the industry is evolving. Still, kudos to Redfin for making something that is both an interesting gimmick and a useful tool for job and home hunters alike.

Continue Reading

Our Parnters

Get The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox!

Still Trending

Get The American Genius
in your inbox

subscribe and get news and exclusive content to your email inbox