Zillow
Zillow Group, Inc., or simply Zillow, is an American tech real-estate marketplace company that was founded in 2006[3] by Rich Barton, Zillow's current CEO,[4] and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia; Spencer Rascoff, a co-founder of Hotwire.com; David Beitel, Zillow's current chief technology officer; and Kristin Acker, Zillow's current technology leadership advisor.[5]
Company type
- Nasdaq: Z (Class C)
- Nasdaq: ZG (Class A)
- Russell 1000 components (Z and ZG)
February 8, 2006
- Rich Barton
- Lloyd Frink
- Spencer Rascoff
- Rich Barton (CEO)
- Lloyd Frink (Executive Chairman)
- Susan Daimler (President)
- Jeremy Hofmann (CFO)
US$1.95 billion (2023)
−US$270 million (2023)
−US$158 million (2023)
US$6.65 billion (2023)
US$4.53 billion (2023)
6,263 (2023)
History[edit]
Early history[edit]
Rich Barton got the inspiration for Zillow while at Microsoft, where he had founded Expedia.com from within the company.[6][7][8] Barton believed that a consumer-facing site could transform the real estate industry in the same way that Expedia had the travel industry.[7][8][9] Barton told the Seattle Post-Intelligencer, "the web [had] been around for now 9 years or 10 years, but still I couldn't get pictures of homes and complete listings and prices and addresses." "We were trying to answer a simple question. What is that house worth? What should we offer if we wanted to buy it?"[10]
In December 2004, Zillow was incorporated in Washington.[11][12] Barton and co-founder Lloyd Frink, a former Expedia executive, self-funded the company, which operated out of a downtown Seattle office with 20 employees.[9]
Zillow's website was launched on February 8, 2006, and included a home-valuation tool that anyone could use.[13][14][15] Other features at the time included information about home sale history and charts and graphs comparing home value appreciation with other towns or states.[15] The site crashed on the morning it launched because its servers were unable to handle the volume of traffic.[14][15]
In July 2006, Zillow announced a $25 million second-round investment.[16] By then the company had grown to 118 employees.[16] In December of that year, the Zillow website included features allowing users to put homes for sale online.[17]
Expansion and growth[edit]
In April 2008, Zillow launched a mortgage marketplace.[18][19] Later that month, the Zillow iPhone app was released.[20][21] Apps for Android and Windows Mobile soon followed.[22]
In 2010, Zillow became profitable for the first time.[22] In September of that same year, Spencer Rascoff was named CEO of the company.[22][23] Rascoff was formerly Zillow's COO and VP of marketing, and before that had been at Expedia.[22] Rich Barton stayed as executive chairman.[22][23]
Rascoff has previously expressed a desire for Zillow to go public.[24] On April 18, 2011, Zillow filed for a $5.1 million initial public offering.[25][26] On July 20, the company began trading under the symbol “Z” on the Nasdaq stock market.[27][28][29]
Zillow made its first acquisition in 2011 by purchasing Postlets, a digital real estate listing and distribution platform.[30][19][31] Several more acquisitions of online real estate companies followed, with Zillow purchasing Rentjuice and Hotpads in 2012,[32][33] StreetEasy in 2013,[34] and Trulia, a major competitor, in 2015 in a $2.5 billion deal.[35][31]
2015 to present[edit]
Following the Trulia acquisition, Zillow began operating under the name Zillow Group, which comprised four real estate brands: Zillow, Trulia, StreetEasy, and HotPads.[35][36]
In April 2018, Zillow announced it would begin buying and selling homes through a new business, Zillow Offers, in partnerships with local brokerages and agents.[37] In June of that same year, Zillow signed a partnership with Century 21 Canada to begin listing Canadian properties on the site, marking the first country outside the United States to be covered by the company.[38]
In February 2019, Rich Barton returned to the CEO role, replacing Rascoff.[39][13] In May of that year, the company announced it would be expanding its home-buying business, Zillow Offers, to new markets.[40]
In February 2020, Zillow's stock was up 18% after hitting a four-year low.[41] In March of the same year, the company announced a cut in expenses by 25%, and paused hiring due to the COVID-19 pandemic.[41] In July 2020, Zillow became one of the first companies to let employees keep working from home indefinitely.[42][43] In March 2021, Zillow stated it had hired about 1,500 employees over the past twelve months.[44] The company then announced plans to increase the workforce by 40% by hiring more than 2,000 employees nationwide by the end of the year.[44]
In November 2021, CEO Barton announced the company would shutter the home-buying part of the business, sell its existing inventory, and lay off 25% of its employees.[45] When Barton announced the company would cease purchasing homes, Zillow owned about 7,000 houses.[46] The division responsible for acquiring and selling homes, Zillow Offers, resulted in the company losing $420 million in the third quarter of 2021.[47]
Controversy and lawsuits[edit]
While factors contributing to estimates are described elsewhere, Zillow seemingly overemphasizes home square footage as the major metric driving property valuation. This method may not be unique to Zillow, but unduly distorts value expectations.[95] Listings in areas where land is priced at high premiums often reflect an identical Zillow estimate to that of nearby homes with comparable interior square footage, but where the home might be decades older. Condition, age of home, special features, and proximity to nuisances are insufficiently factored into the estimate. Zillow has made some effort to add balance by including an option for owners to provide their own value estimate, but these figures can be similarly unreliable as being opinion instead of quantifiable.
In 2014, Zillow faced several lawsuits from former employees at the Zillow operation in Irvine, California, alleging violations of California Labor Code and California Business and Professions Code.[96] On February 26, 2016, the U.S. District Court for the Central District of California certified the class to include anyone who worked as an inside sales consultant at Zillow between November 2010 and January 2015.[97] Among the numerous allegations brought by high-profile attorneys Bobby Samini and Mark Geragos, Zillow is accused of failing to pay wages, failing to pay overtime pay, and failing to provide meal and rest breaks. Zillow responded: "the narrative being pushed by this law firm through their multiple lawsuits is completely inconsistent with those who know and work with Zillow...the behavior described does not accurately depict our culture or the 1,200 Zillow employees."[98]
In addition, Samini and Geragos represented a former Zillow employee in a sexual harassment action against the company, alleging "sexual torture"[99] and "the most heinous acts of sexual harassment imaginable".[100] According to the lawsuit, Zillow's Southern California office represents an "adult frat house where sexual harassment and misconduct are normalized, condoned, and promoted by male managers."[99] Based on the allegations against the company, Samini has called Zillow a "modern day Animal House."[101] On May 5, 2016, Zillow settled the action for an undisclosed amount, without admitting any wrongdoing.[102]
In 2017, Zillow sent a cease-and-desist letter to Kate Wagner, the author of McMansion Hell, a blog that lampooned the presentations of luxury homes found on the site.[103][104] Wagner was represented by the Electronic Frontier Foundation. Zillow later released a statement saying it had "decided against moving forward with legal action" on the matter.[105]
