Zillow consumed longtime rival Trulia last month, leaving the Seattle online real estate powerhouse without its number one nemesis. But there’s a new enemy lurking for Zillow.
And it’s clear from remarks that Zillow CEO Spencer Rascoff made Tuesday night that the villain is Rupert Murdoch’s Move Inc.
In a wide-ranging discussion that covered everything from Rascoff’s early career in investment banking to macro trends in real estate to the challenges of balancing work and family at a startup, the tech executive pinpointed News Corp.-owned Move Inc. twice. And not in a good light.
The first instance at the Startup Grind event in Seattle came in reference to Errol Samuelson, the former Move executive who joined Zillow last year as chief industry development officer. Samuelson and Zillow were promptly sued by Move for allegedly hijacking trade secrets, with Sameulson sidelined from taking on his role at Zillow by a Washington State Superior Court Judge, a ban that was just recently lifted.
Asked about hiring Samuelson, Rascoff noted that it is a bit unusual to hire the president of a competitor. But he said that people tend to like to work on “winning teams.”
“I always respected him and thought he was an incredible executive at a crappy company,” said Rascoff, adding that Samuelson wanted to have the biggest impact on the “biggest stage.”
There’s certainly no love lost between Zillow and Move Inc., which earlier this week ramped up its allegations against Zillow.
Move, which operates Realtor.com under a joint operating agreement with the National Association of Realtors, alleged that Zillow used confidential trade secrets from Samuelson to aid in the $2.5 billion acquisition of Trulia. Move is asking the court to remove the “commercial advantage” of the Zillow and Trulia merger.
In remarks Tuesday night, Rascoff essentially said the Move allegations were hogwash, and pointed out that Zillow had attempted to acquire Trulia multiple times in the past.
“Their latest allegation in this lawsuit is that Errol gave us the idea to buy Trulia,” said Rascoff. “I already described at the beginning of our talk the rather obvious idea to acquire Trulia occurred nine years ago, and it’s obvious to anyone that has been paying any attention that Zillow and Trulia might tie up at some point. I can’t comment on that specific allegation any further.”
Murdoch also has fired salvos at Zillow. At a real estate conference in January, Murdoch exclaimed: “What the hell does Zillow mean?”
Rascoff, meanwhile, has in the past dubbed Realtor.com as Rupert.com. Interestingly, Rascoff also noted that he got his start in business working at Murdoch’s Fox broadcasting, helping to analyze TV show ratings, an experience that the tech executive said taught him the importance of interpreting data.
It’s not just Move Inc. that is nipping at Zillow’s heels. A new industry consortium known as the National Broker Portal Project — made up brokers, franchisors and multiple listing service — is looking to create a national competitor to Zillow.
Rascoff doesn’t give the project much of a chance, and even said it could face antitrust issues.
“Having run a consortium company before in the travel industry where we had six airlines that had invested and created Hotwire, I can tell you first-hand that it is really hard to get competitors to agree on anything. It is also usually illegal to organize things like that. Companies that compete with one another aren’t really supposed to get in a room and talk about colluding, so I think there are some anti-trust issues associated with that initiative.”
Most importantly, though, Rascoff said it will be extremely hard for the new portal project to build an audience. He said it took Zillow 10 years and several hundreds of millions of dollars in losses to get to the point where it has an audience of 90 million monthly visitors.
“I worry about a lot of stuff at Zillow, and that is not at the top of the list,” said Rascoff of the new portal effort.