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Web 3.0 and Zillow

Posted on Wednesday, Jul 11th 2007

We have already discussed the online realty industry overviewand have covered ZipRealty. Now we take a look at Zillow’s offering from the Web 3.0 perspective.

Rich Barton and Lloyd Frink, the founders of Expedia, launched Zillow on February 8, 2005. The Company is based in Seattle, WA. According to Comscore, Zillow had 4.1 million unique visitors in March 2007. Zillow was the only online brand to receive AdAge’s Marketing 50 Award in 2006. The site was also named as one of the top trendsetters of 2006 by the Swanepoel TRENDS report for real estate. Zillow was ranked among TIME Magazine’s “50 Coolest Websites” of 2006.

The best contextual split that Zillow does is by separating the site for buyers, sellers, owners and professionals in real estate. Other than that there is not much to talk about.

Zillow doesn’t have a lot of contextual information on homes, neighborhood details, community, landmarks on maps, school districts, etc. Zillow also doesn’t have separate categories for residential establishment, commercial buildings, and rental.

Zillow allows users to search homes, post home listings, negotiate prices, get market listings and read articles on finance or buying & selling of properties. The site has more than 70 million U.S. homes in its database and has 50,000 registered real estate agents.

Zillow has over 1 Million registered users who contribute to the site’s rich content. The users are free to write, edit or add to information on Zillow, post photos, create their own estimates for homes for sale, review neighborhood, etc.

At Zillow, you can search for homes, with full information on their value changes in a given time frame, aerial views, and also compare prices of other homes in the region.

This apart, Zillow has a number of interesting and functional tools.

Make Me Move enables home owners to set a price for properties they would like to sell without actually putting it in the market. Interested buyers can get in touch with the owner for more details.

Zestimate allows users to determine the true market value of a property from starting point, considering its location, features and market conditions.

Zillow along with Microsoft offers a new tool, Bird’s Eye View, which is actually a feature in Microsoft Virtual Earth. It shows aerial photographs of property locations. Zillow makes use of this function for infotainment through “Famous TV Homes” on the site.

Zillow’s open API is used by several application partners. One such, uLocate allows users to locate and get prices of real estate by using a mobile phone. Currently, it works on just six GPS-enabled phones running on the Sprint or Nextel network.

Zillow has interesting community features in the form of question and answer section, blogs and information posting. The Home Q&A enables users to interact with realty agents on property deals. This is like a virtual online hub where anybody can participate in a dialog; home owners, potential buyers, sellers or real estate agents.

Zillow’s partner uLocate which operates on mobile networks, charges $2.99 / month and has the potential to earn $1.5 million per month from neighborhood realtors. Presumably, Zillow gets a cut. Not a whole lot other Commerce features are visible on the site, and it is not a commission-supported agency business model at all. All their revenues are expected to come from Advertising.

Vertical Search
Zillow allows users to search home or property by zip code, city, square footage, lot size, family type, bedroom, bathroom, price range, etc. However, the site does not cater to contextual nuances.

Zillow allows user to save searched homes as favorites and see them together on a map, create their own estimates through Track Zestimates, create comparables list and use it to determine the selling / asking price. Moreover, registered members also get e-mail alerts for favorite homes tracked and Zillow Buzz gives them latest updates about new Zillow features.

Also, every home in the site’s database has a separate page dedicated to it where users can post photographs or information on a home or neighborhood, its asking price, etc.

Business Model
Zillow makes its money mostly from ad revenues. Looks like, it won’t be easy to build a company that justifies $57 Million in venture funding with this business model. It is heavy on coolness factors, light on useful functionality!

Overall Web 3.0 Rating: Web 3.0 Rating: Context: B+, Content: B, Community: B, Commerce: C, Personalization: C, Vertical Search: B; Overall Rating: B.


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Hi Sramana, it’s David from Zillow.

Some corrections:

1) 50K RE agents and over 1MM users are are registered on Zillow.
2) ULocate is one of many users of Zillow’s open API – they don’t provide our API and aren’t otherwise partnered with Zillow.
3) Zillow does not sell leads — our revenue model is strictly advertising based.

So, I’m going to have to give this post a C+ but you could improve your grade by publishing an update. 😉

I’m also very pleased to announce that we just released a major extension to the community features on Zillow. Please see this blog post (and the website) for more details …

David G from Wednesday, July 11, 2007 at 11:57 AM PT


Thanks for the updates. We will make appropriate corrections. However, can you articulate how much you make from advertising?

There is a huge question mark around whether your business model scales …

Thanks, Sramana

Sramana Mitra Wednesday, July 11, 2007 at 8:46 PM PT


Thanks for making the corrections.

As you know, Zillow is a private company and a very early stage startup — I can’t share financial details. The site is 17 months old. Ad revenues to date are impressive and our audience is extremely attractive to advertisers. But our primary focus right now is not revenue – it’s our product and its audience. As it should be.

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