Why Zillow.com Should Be Worried
A: I read this piece on Rain City Guide which is quickly becoming a regular part of my daily real estate blog browsings. In this post Dustin Luther looks at a few reasons why Zillow.com should be 'very worried'.
As I reported a few months back in my post "Online Real Estate Landscape is Changing", there are a number of new online real estate search sites that have popped up in the past year or so that all claim to have the best interface and database of home listings for your city. Zillow.com on the other hand took a different direction and built a website offering you instant home valuations. So far, their efforts have been met with many criticisms regarding their "Zestimate Accuracy' and incompleteness of data (Sorry NY'ers, you can't find your apartment valuation here).
In Dustin Luthers post, "Why Google Base Matters", on RCG the other day he discusses a few good reasons why Zillow.com should be 'very worried':
1. Google Entering Listings Market: I was playing around with some google searches when I noticed a new box that shows up when you do a real estate search...as in [Seattle+real+estate]. My impression of Google's latest features is that the data is VERY incomplete and the interface is ugly.
2. Zillow Content is Not Sticky: You are not sticky. I'm a hard-core real estate user and after satisfying my Day 1 voyeurism, I've never had a good reason to visit your site again. I've talked with your staff about this and I know that you are not geared toward a user like me, but I recommend you find a way to create stickiness if you really are planning to be an ad-based media company. Why? See reason #3...
3. Google is the First Step to Getting to Zillow: People start a home search (and especially people moving to a new city) by typing a query into a google search box. From now on, those people are ALL going to see Google's offerings, and should Google decide to add a valuation tool, the tool will likely be "good enough" so that they never even both going to Zillow. Google only has to be good enough at providing a valuation in order to capture most of your market. Why? See reason #4...
4. Inaccurate Data: People don't use your site to get the "exact" price of their home since you don't even try to provide it. If you asked 10 appraisers to value a typical Seattle home, you would get 10 different answers and at least a 5% standard deviation in their answers. Even if you can improve your answers by 2% more to match the variability inherent in the emotional decisions associated with buying a home, that is still not good enough. Don't waste much more time trying to improve your appraisal methods. You're good enough and soon others (like Google?!?) will have a service that is good enough as well. Instead, find something sticky. You have a very talented team, so I doubt you're suffering from lack of ideas. Nonetheless, it is clearly time to develop something that will bring me back to your site on a regular basis.
Dustin brings up some very interesting points and I happen to agree with him 100%. I do not see Zillow.com's current content being good enough or sticky enough to warrant users to come back everyday. If their model is online advertising or subscriber fees, something needs to change over there. Knowing that Google showed their face in the home listings market means there are Google Labsmen working full time to make something that already exists better. Its hard to bet against a company that has a market cap $100 Billion, tons of cash at their disposal, and a base audience and reputation in place to offer data directly to the user through their site.
Add to Newsvine
