Zillow Group’s new CEO Rich Barton is back in the driver’s seat because of his self-professed affinity for “big swings,” and the company’s fundamental shift to focus on home sales certainly fits the bill. The new chief executive and his leadership team see some parallels between the new path Zillow is embarking on and some of the important bets taken by other taken giants.
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Zillow’s shift — going all in on remaking the process of buying and selling homes — reminded Barton of a major move at Netflix, where he sits on the board.
“I see lots of parallels here as we take Zillow Group into the next phase with what we saw at Netflix, when we moved from DVDs by mail to streaming, and then to originals,” Barton said. “It’s that kind of change.”
The Seattle-based real estate giant made an unexpected executive shuffle Thursday as longtime CEO and co-founder Spencer Rascoff will step down after nine years. Barton, who co-founded Zillow in 2005 with Rascoff and Lloyd Frink, returns as CEO, a title he held during the company’s first five years.
Rascoff will remain on the board of directors while Frink will replace Barton as executive chairman.
Allen Parker, Zillow’s CFO, has only been on the job a couple of months after coming over from Amazon, where he spent more than 12 years and was most recently vice president of finance overseeing its worldwide Amazon Devices, Appstore and Amazon Pay businesses. He helped work on the acquisitions of Whole Foods and Ring, so he knows a thing or two about big moves.
Parker compared being at Zillow today to the feeling during the early days of Amazon’s devices push and the beginning of Amazon Web Services. The company’s cloud computing arm has been a profit machine, boosting Amazon into the stratosphere of the world’s most valuable companies, and its devices group have put out industry-leading gadgets such as the Amazon Echo.
“I saw first-hand the importance of rallying the organization around these new high growth opportunities without losing site of maintaining the core performance of your current business, which helps fund those big swings,” Parker said.
At the heart of the company’s transformation is a shift to emphasize Zillow Offers, a program launched last year that lets potential sellers request offers directly from Zillow. Zillow set an ambitious goal of bringing in $20 billion in revenue in three to five years from its Homes segment, which includes Zillow Offers. That would be a serious accomplishment considering Zillow as a whole brought in $1.3 billion in revenue for all of 2018.
Initially, the changes seemed to spook investors, and Zillow stock plunged 7 percent in the minutes following the surprising announcements.
By the end of the investor call, Barton and crew seemed to have won over most doubters. Zillow stock was up more than 9 percent at the conclusion of the call.
Barton finished off his pitch for “Zillow 2.0” by calling back to important decisions from other tech giants.
“Can you imagine if Netflix ignored streaming?” Barton asked.