Zillow CEO Spencer Rascoff

On the surface, OpenTable may not seem to hold many similarities with Zillow. After all, one specializes in restaurants, and other in real estate. But Zillow CEO Spencer Rascoff sees similarities between the two companies, telling Business Insider that those companies which simply provide leads to businesses are ripe for disintermediation.

In Rascoff’s view, OpenTable has figured out a way to provide more online tools to restaurants, expanding beyond its initial lead generation service.

“It provides everything from software to manage paid time off, to tip allocation, to frequent diner programs, to rewards programs for the diners, and so on,” said Rascoff, who also drew parallels between Zillow and LinkedIn.

“We’re trying to move to a world where agents wake up, roll out of bed, and pull out their tablet or PC and manage their day and their workflow based on the tools that Zillow provides to them,” Rascoff said in the Business Insider interview. That’s part of an ongoing strategy that Rascoff first laid out earlier this year, explaining some of the new online tools that the company is offering to real estate agents.

As I’ve noted in the past, that strategy is putting Zillow on a collision course with Kirkland-based Market Leader.

The OpenTable comparison was interesting to me, in part because Zillow already is nearly as big as the restaurant reservation service.

Consider this:

Zillow boasts a market value of $934 million, with fourth quarter revenue of $19.9 million. That was an 108 percent increase in revenue. (Zillow reports first quarter numbers May 2).

OpenTable, meanwhile, is valued at $996 million. Its last quarterly revenue haul stood at $37.2 million, an increase of 21 percent over the same period last year.

Later in the interview, Rascoff discusses Redfin — who he doesn’t view as a competitor — and San Francisco’s Trulia — simply noting that Zillow competes “with wherever our home shopper might get local real estate information.”

Rascoff also laid out why he thinks Zillow’s best times are ahead, noting that the company now has “less than 1 percent wallet share of what agents spend on advertising.”

Comments

  • DejaVu

    Open Table offers a  direct conduit from the consumer to the restaurant. They provide direct value on many fronts. OT needs reservation software at the location to provide the value. I assume other Open Table business solutions flo from that. They are true business partners.

    I would suggest the comparison he makes is Apples and Oranges. Zillow has no real partnership with agents may never have one.

    • http://blog.findwell.com Kevin Lisota

      As a brokerage customer of Zillow, I disagree. They do have products that provide direct value to agents.

    • http://twitter.com/spencerrascoff Spencer Rascoff

      “No real partnership with agents?” Many thousands of real estate agents spend thousands of dollars a year with Zillow to use our tools and connect with our consumers. We provide a free CRM to all real estate agents, free widgets for their website and facebook page, free listings syndication tools, and many other freemium tools and marketing services. Around 75% of our revenue comes from our “Marketplace” segment, which is mostly real estate agents spending money with Zillow. In addition, almost every major real estate brokerage in the nation has partnered with Zillow to market their listings on our website. I don’t understand how you can say “Zillow has no real partnership with agents many never have one”. That doesn’t make any sense.

  • http://twitter.com/fijiaaron Aaron Evans

    I’ve heard of Zillow.

  • Peter

    If Zillow wants to be like OpenTable, they need to make their tools more friendly for the consumers that are actually shopping for real estate, just as OpenTable is for consumers that are actually dining.

    On Zillow’s iPhone app, if you try to save a search for a particular city, it saves the search as “near whatever zip code you are in”, which returns a huge “noise” results from other cities while missing many houses in the city of interest.  Many, many, house hunters are locked into a particular city for a school system, so the inability to search for a city renders Zillow to being “niche” app to research a house once you have found it rather than being the primary tool that consumers use to find houses. 

    Requests to Zillow’s technical team to fix this go unanswered.  The technical team, which is quite skilled, needs to have oversight from someone with business knowledge if they want to become THE tool in real estate.  Although I would like to use Zillow for everything, right now I am forced to use the Realtor.com app as my primary market search tool and only go to Zillow in a niche capacity to research a house once it’s found.  Zillow’s development team is more concerned about adding cool stuff than they are about fixing a basic problem that is a major impediment to Zillow’s goal of becoming the OpenTable of real estate.

    • http://twitter.com/russellhatfield Russell Hatfield Jr.

      Hi Peter,

      Russ from Zillow here. Appreciate your feedback on our iPhone app. As much as I assure you that each of our teams is stacked with a mix of brilliant technical and business minds(I’m biased, I know) we know there’s always room for improvement so do appreciate the feedback. I’ll make sure this gets directly to our mobile product team and invite you to contact me directly at russh at zillow dot com if you have any other thoughts to share. Thank you! –Russ

      • PeterNY1

        Russ, it’s been almost a year since this message (and more than a year since I put several cases into the Zillow tech team). This problem still has not been fixed and there has never been any response to the tech cases I entered. If Zillow wants to be THE real estate app, it needs to understand the needs of people who use it.

        Try this: save a search for your favorite city in the Zillow iPhone app. Now go to “saved searches” and you will see that, instead of the city, it will say “near zip code” (whatever zip code it thinks is best for that city). You will see results for only some of the houses available in that city (many will be missed), and you will see a huge number of houses from other cities around that zip code.

        When you are tied to a city for schools, or because you want to be in a school system (this applies to most families), it’s critical that city search work. I could see Zillow ignoring a niche need, but not being able to accurately search by city is a major flaw that Zillow seems quite content to ignore.

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