Zillow sees slowing demand for ads in housing downturn
Zillow sees slowing demand for ads in housing downturn
Abstract
Zillow Group Inc. shares plummeted after the company predicted that a significant contraction in home sales would weigh on the amount of advertising it can sell to real estate agents. While Zillow's second quarter "Results weren't dramatically out of whack, the 3Q guide was extremely weak. It's clearly a difficult environment for agents and they have cut back on advertising."Zillow wasn't the only real estate technology company to provide discouraging guidance for the third quarter. "Agents saw demand go down and longer cycles for their customers to close," Zillow Chief Financial Officer Allen Parker said on a conference call with investors. Zillow's attempt to rapidly expand the effort faltered, pushing Barton to shutter the business last year in a move he said would protect the company from bigger losses in a future downturn. Zillow pivoted again, laying plans to build a housing "Super app" to integrate tools consumers and agents use to navigate the buying or selling process. The company is adding a new component to that effort, allowing visitors to Zillow's sites and apps to request a cash offer for their homes from Opendoor. The arrangement lets Opendoor tap into Zillow's audience, while helping Barton's company fulfill consumer demand for a service without putting capital at risk.