From hiring to firing to IPO
In Zillow’s earliest days, they invested a great deal in their talent, snatching up the best of the best, then in 2008 announced layoffs and this month announced plans to go public in 2011 indicating a major turn of events. Over the next year, Zillow will be sweet talking investors for their candidacy as an IPO which is being hailed in technology circles as commendable, noting Zillow’s innovations. Others criticize the move as Zillow is not in profit mode, but companies not valuated on the profit model, rather the potential profit of their model and for the critics of Zillow’s current profit mode, I would ask people to compare how many dollars Twitter.com has made versus the millions invested.
Is their innovation debatable?
Companies like Trulia and Realtor.com compete for home seeker eyeballs and are running the same race to be the first to invent the shiniest iPhone app to keep the attention of the A.D.D. prone web users, so Zillow’s level of innovation is debatable, however their chutzpah is not. When was the last time you heard of a major company going public? Those days have been gone for some time.
Trulia announced this week upgrades to their advertising platform to offer hyper-local ads and Zillow plans on altering their ad platform as well to improve their chances with investors to take their Mortgage Marketplace ad income from 10% to 50% by next year via lead generation Zillow’s COO Spencer Rascoff told BusinessWeek.
Why Zillow and not the others?
Did companies like Trulia that avoided remaining loyal to their employees and not laying off their talent hurt themselves by not shedding weight in the toughest times? Did Realtor.com wait too long to get into the iPhone app store? Does Zillow plan to take the route of Redfin and become an industry disruptor with the help of a high powered, high price public relations firm? We can speculate a great deal about the way forward, but what is clear is that Zillow intends on taking a stand.
I hope the kind folks that we all know at Zillow, David Gibbons, Drew Meyers and Sarah Bonert each have a drawer-full of stock options that they can cash out when Zillow goes public. If they can sell it off to Wall St, you know the guys who sold subprime mortgages as AAA bonds to Norwegian villagers, widows and orphans, more power to them. Any one of those guys could take the whole deal with their 2009 bonuses.
No surprise here . VC’s have to get a return on capital and provide liquidity or the money will go somewhere else
I’m still in the dark as to Z’s intrinsic value.
I agree BawldGuy. One thing is certain, if they go public, Zillow will finally have to start producing financial statements for public scrutiny. Their variable mortgage lead pricing model which to date is ‘clear as mud’ will be of interest to me.
Gotta wonder how any investor would conclude it’s a good place for their capital.
A fool and his money are soon parted?
Grin
Hi, it’s Amy from Zillow. I just want to make a clarification — Zillow did not announce plans for an IPO. Zillow’s COO was asked in an interview this week whether an IPO is possible in 2011 and he answered it could be a possibility, but it’s not the company’s focus at this time. You can find more information in this TechFlash post:
techflash.com/seattle/2010/01/zillow_to_ipo_in_2011.html
Sounds like Rascoff spoke too soon then, in his interview with Business Week:
Then on to your discussion with BusinessWeek:
I’m guessing Zillow wasn’t ready to announce and it slipped or perhaps the formal press release hasn’t been made but either way, the interview with Business Week was crystal clear that Zillow has IPO plans.
Interestingly enough, I’ve learned that Mashable read it as an IPO announcement too:
It wasn’t just a yes/no hypothetical question asked by Business Week, Amy, and regardless of whether or not it’s the “focus” of the company right now, going to a conference to talk to GSG about an IPO and telling Business Week about IPO plans is an announcement to go public, whether it was an official announcement made via press release or not, an announcement from Spencer made verbally or in print IS an announcement from Zillow, no matter how you slice it.
Bless you, Lani!!
(standing in the corner eavesdropping)