Archive for the ‘zillow’ Category

2008 Predictions

December 30, 2007

Real Estate 2.0 Predictions

Redfin will run out of money. Unable to raise another round, they will enter the TC deadpool towards the end of 2008. The company’s assets will be listed on Ebay and the reserve price will not be met. Glenn Kelman (CEO) will go back to school, get that MBA from Harvard and become an owner/operator of a Quiznos sandwich franchise. Subway sandwich artists around the country will cry foul.

Since every major real estate company that signed up with Trulia has now inked deals with 993+ me-too real estate search sites (including my 14 y/o neighbors startup), Trulia’s initial successes have become null-and-void. Agents and brokers will continue to feed their listings to as many sites as possible, making it impossible for Trulia to gain a competitive advantage or any real traction. Trulia will continue to operate throughout 2008 but Bjorn and Sven will sell cheap (2nd quarter 2009) and start their search for the next big thing (they will utilize heat map technology to discover their next endeavour).

Zillow will continue to display declining values to a shrinking pool of real estate masochists. Agents will realize that paying $0.01 per ad impression ($10CPM) to put themselves in front of the wrong audience is a losing proposition. Zillow investors will push the company to ramp up the marketing spend and we will see a Zillow commercial during the Super Bowl. Zillow’s revenues will not support an IPO and the company will be sold to Yahoo! towards the end of 2009 or beginning of 2010 for a small profit.

Craigslist will introduce a small fee to post in the real estate section. Everyone will pay it.

Greg Swann will start a cult. The BloodhoundBlog Unchained Conference is the opening he has been crafting in his head since he was 4 years old. All conference attendees will be deloused, forced to remove their shoes/socks and don a robe of hemp for the initial weekend of re-education. Their brokers will never see or hear from them again.

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Trouble for Zillow

October 26, 2006

Funny – the same day techcrunch writes up zillow (again), they get hit with multiple FTC complaints.

“Zillow is placing the American dream of homeownership at risk for countless working families,” says John Taylor, NCRC President and CEO. “For a company that represents to consumers that they are the ‘Kelley Blue Book of Homes,’ this is a very dangerous situation. We call upon the FTC to intervene and ensure that Americans receive accurate appraisals and valuation information to protect the single most important investment of their lives: their home.”

“NCRC and its members are aware of a growing number of real estate and lending professionals who use the misinformation on Zillow.com to perpetrate fraud in our nation’s markets, often by targeting consumers in violation of Federal and State Fair Housing Laws.” continues Taylor. “During this time in our economy when the real estate market is changing and consumers are already at risk of being over extended due to the increased access to non- traditional loans, Zillow’s misinformation exacerbates the situation. Practices like theirs undermines the critical importance of valuation protections that benefit consumers and lenders alike, and guide the actions of all valuation professionals.”

It will be interesting to see what happens.

Companies That Know They Suck

October 17, 2006

companies that suck

Here is a funny list of domain name registrants I put together…Since this is a real estate related site – I started out with a few of the “big real estate guys.”

Domain Name: HOMEGAINSUCKS.COM

Registrant:

HomeGain.com, Inc.
1250 45th Street
Emeryville, CA 94608
US

Record expires: 22-Dec-2007
Record created: 22-Dec-2004

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Domain Name: ZILLOWSUCKS.COM

Registrant:

Zillow.com
999 Third Avenue
Suite 4600
Seattle, Washington 98104
United States

Created on: 01-Sep-05
Expires on: 10-Nov-07

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Domain Name: TRULIASUCKS.COM

Registrant:

Trulia
500 Treat Ave
San Francisco, California 94010
United States

Created on: 21-Sep-05
Expires on: 21-Sep-07

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Domain name: upssucks.com

Registrant:
 
United Parcel Service
340 MacArthur Blvd
Mahwah NJ
07430
US
 
Created on: 1997-12-31
Expires on: 2006-12-30

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Domain Name: googlesucks.com

Registrant:

Google Inc. (DOM-258923)
1600 Amphitheatre Parkway
Mountain View CA
94043 US
 
Created on: 1999-Oct-15.
Expires on: 2007-Oct-15.

——————————-

Domain Name: YAHOOSUX.COM

Registrant:

Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
US

Created on: Fri, Sep 24, 2004
Expires on: Mon, Sep 24, 2007

——————————-

Domain Name: AMAZONSUCKS.COM

Registrant:

Amazon Technologies, Inc.
P.O. Box 8102
Reno, Nevada 89507
United States

Created on: 08-Apr-02
Expires on: 15-Apr-08

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Domain Name: aolsucks.com

Registrant:

AOL LLC
22000 AOL Way
Dulles, VA 20166
US

Creation Date: 22-Jan-1996
Expiration Date: 23-Jan-2007

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BLOGGERSUCKS.COM = Available!

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Domain Name: CNNSUCKS.COM

Registrant:

Cable News Network LP, LLLP
One CNN Center
Box 105366
Atlanta, GA 30348
US

Record expires: 01-Mar-2007
Record created: 01-Mar-1999

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Domain Name: FEEDBURNERSUCKS.COM

Registrant:

Burning Door
211 W. Wacker Dr.
Suite 1130
Chicago, IL 60606
US

Record expires: 08-Jun-2008
Record created: 08-Jun-2005

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Domain Name: BLOCKBUSTERSUCKS.COM

Registrant:

Blockbuster Inc.
1201 Elm Street
Dallas, TX 75270
US

Record expires: 22-Nov-2006
Record created: 06-Sep-2003

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Domain Name: GODADDYSUCKS.COM

Registrant:

GoDaddy.com
14455 N Hayden Rd.
Suite 219
Scottsdale, Arizona 85260
United States

Created on: 15-Apr-02
Expires on: 15-Apr-07

——————————-

Domain Name: ORBITZSUCKS.COM

Registrant:

Orbitz
200 South Wacker Drive
Suite 1500
Chicago, IL 60606
US

Record expires: 06-Aug-2007
Record created: 06-Aug-2003

Zillow Post Update

October 12, 2006

I was just searching through my “blog spam” and found this comment on my Zillow Post.  The “commenter” did not leave a website link…but I thought you may be interested in his take.  I happen to agree.

–start comment–

Here’s a little question that I think will be fun and interesting to answer… how many visitors will Zillow need to attract to generate the revenue, earnings, and market value that will satisfy their investor’s?

Assumptions
– $50M is all the VC money they raise
– 60% of the company is now owned by VC’s, giving them a current valuation of $83M
– 5 year time horizon to exit
– VC’s want a 75% IRR

This means this now $83M company needs to be worth $1.36B in 5 years for the VC’s to get their IRR.

Housevalues (SOLD) currently is worth $162M with a P/E of 14.7. So if the market values Zillows at the same P/E, it implies Zillow needs to be earning $92.6M in profits by 2011. Ok, so what does that mean for their top-line?

If you assume Zillow will be 2X as profitable as Move.com (3.5% net margin in Q2 07), Zillow need to generate top-line revenue of $1.32B in 2011 to get the requisite $92.6M that will give them the $1.36B market valuation.

So how many users must Zillow attract to get $1.32B in revenue?

Well, it depends on their average CPM (they do claim to be an advertising business do they not, so that’s a fair measure). Let’s assume they generate a very high CPM of $10 per 1,000 page views (Myspace is getting sub $1 CPM’s).

1.316B / 10 = 131 million ad units X 1000 page views per ad unit = 131,684,095,177 page impressions.

Assuming each visitor to their site views 10 pages, Zillow must attract 13.2B visitors to their site PER YEAR by 2011.

Considering their are 6.5B people on earth… every man woman and child on earth must visit Zillow 2.0 times EACH per year in order for Zillow to generate the profits, via an advertising model, that will create the profits to support the market value that will pay back the investors.

My take… Advertising is not really their model.

–end comment–

Will Zillow Die?

September 27, 2006

Zillow 

I decided to sit down and give you my take on the all mighty king of the hill.  While I have some things to say about Zillow, two of my favorite bloggers have already said much of it (better than I ever could)…I believe they have effectively picked apart the foundation of Zillow’s business – so I am going to try to look at Zillow from another angle.

As we all know, Zillow has raised in excess of $50M from various venture capitalists. 

My first question would be – if Rich Barton believes in the viability of this company/business model, why didn’t he maintain 100% ownership of the stock?  $50 million is a drop in the bucket for this guy – he literally has 60+ stacks of $50M, and he couldn’t wouldn’t bet one of them on his brainchild?  If he doesn’t believe in it enough to bet big on it, why in the hell would anyone else?  What are these VC’s thinking?

My second question would be – How are they going to make money?  I know the real estate profession is infamous for throwing money away on bad/useless/anti-ROI advertising, but come on.  I would think hope that most agents are smart enough to figure out that their odds of actually hooking up with a buyer or seller through a banner ad on Zillow are about nil.  Visitors to Zillow are not buyers and sellers searching for a real estate agent to represent them in an upcoming transaction.  The good/bad thing about the web (depending on which side your on) is that results are easily measurable.  If you are an advertiser wasting money, you can find that out quickly.  If you are a website selling ads, you could be screwed.

My third question would be – If the real estate market continues downward, do you think Zillow’s traffic will go up?  I am pretty sure that Zillow’s traffic will be directly related to property prices.  Everyone loves to see how much money they are making – it is fun, but most people are not going logon each day to watch their zestimate go down (accurate or not).  Personally, I find the site quite boring…one visit seems like enough.

My fourth question would be – if the validity of their purpose has been picked apart, and their revenue model is full of fatal flaws – when do they run out of money? 

Maybe we should start a pool?