Online home marketplace Zillow reported record revenue, record traffic, and record real estate agent growth this past quarter, probably mostly due to a massive increase in marketing, advertising, and acquisition costs that led to a quarterly loss of $10.2 million.
In other words, the company is doubling down on owning the marketplace. Or following the Amazon.com strategy to building company value.
“We’re executing to the long game and making great progress against our strategic priorities to grow audience and gain market share, grow our Premier Agent business, and grow our emerging marketplaces,” CEO Spencer Rascoff said. “”The second quarter was a tremendous one for Zillow as our focus and investments delivered record revenue, traffic and Premier Agent growth.”
Revenue was up 69 percent to $46.9 million, site and mobile traffic was up 66 percent to 61 million monthly unique users, and real estate agent signups for premium accounts was up 71 percent.
The company is working hard to differentiate itself with multiple products and revenue streams for different verticals within the housing and home industry, and seeing some success, Rascoff said.
“Our emerging marketplaces are taking flight as Mortgages Revenue more than doubled in the quarter compared to last year, and we’re beginning to test monetization in our growing Rentals Marketplace.”
The $10.2 million quarterly loss was primarily a one-time acceleration of share-based compensation: $7.1 million relating to an acquisition, plus millions more for marketing and advertising. The company essentially tripled its advertising spend to just over $3 million in series of campaigns that include nationwide TV spots. The program appears to be working, as in July alone consumers viewed over 321 million homes on Zillow’s mobile apps.
Things must be going well when you get the president to visit.
Tomorrow, President Obama will be answering questions on housing in a Zillow-sponsored event. CEO Rascoff will moderate, and the Q & A will be broadcast via livestream at Zillow.com/whitehouse, at 10 AM PST.
Zillow’s primary competitor is Trulia.