Zillow CEO Spencer Rascoff is building for the long-term, trying to become the dominant player in the online real estate category.
Wall Street isn’t sure what to think just yet. The stock, up nearly 200 percent this year, fell about seven percent on Wednesday after an earnings report showed a $10.2 million loss for the quarter due to acquisition costs and increased marketing spending.
Nonetheless, Rascoff told analysts on a conference call that the business is “firing on all cylinders.”
Zillow almost seems to be in land-grab mode right now, investing heavily as it looks to conquer rivals. It almost seems to be following the old mantra of Amazon.com: Get Big Fast. (However, Amazon, amazingly, achieved its status largely without any advertising spending).
Rascoff underscored the company’s focus on audience growth on Tuesday, noting that the 61 million unique visitors that it attracted during the month of July represented a whopping 24 million new net additions year-over-year.
“To put our audience growth in perspective, during just the past year, we added the equivalent in unique users of almost an entire Move Inc. or two thirds of a Trulia,” said Rascoff, referring to his company’s two primary competitors. “This is staggering growth.”
Rascoff attributed some of the traffic growth to the company’s national ad campaign, claiming that they’ve doubled their lead in market share over their closest competitor so far this year.
“The investment in our brand as well as in development is resulting in accelerating trends all of the way down the shopping funnel. And while building brand awareness is a multi-year endeavor, we have also seen early positive signs in consumer awareness at Zillow,” he said. Rascoff cited stats from Google which noted that searches for Zillow increased 61 percent, compared to increases in the teens for competitors.
“Investing in our brand today is part of our long-term strategy,” he said. “We believe in the primacy of audience — that whichever model serves the consumers the best, establishes the largest household brand and wins the largest sustained audience ultimately will take the lion’s share of the media revenue available in our category.”
Rascoff later noted that 2013 and 2014 are “not the times to be timid on advertising.”
“This is still very early days in terms of brand growth,” he said.
Editor’s note: Zillow plans to host an online chat with President Barack Obama on housing today at 10 a.m.