Zillow Zeros In on Mobile

The Motley Fool recently paid a visit to online home and real estate marketplace Zillow (NASDAQ: ZG  ) . We chatted with Chief Revenue Officer Greg Schwartz about Zillow's revenue streams, monetization strategies, and what lies ahead.

Greg explains why mobile is such a great match for Zillow, and how the company expects to improve conversion rates on the leads it sends to its Premier Agents.

To view the full interview, click here.

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Brendan Byrnes: Can you talk about monetization, desktop versus mobile, how that impacts your top line?

Greg Schwartz: Yeah. We think of Zillow as a mobile company now. Again, the key stats were on the weekend at least 65% of our visitors are on the 25 apps, so the consumer's already moved there.

They tend to be lowest funnel opportunities, or individuals, so they're walking around in their neighborhood, standing in front of a home on a Saturday or a Sunday and they're flipping through photos in the interior of the home, and then we provide a selection of wonderful and rated real estate agents for them to connect with right then and there.

What's interesting is, a lot of the dialogue is happening on text. The immediacy of text -- getting it out of the email box -- particularly on the weekends is really, really important, so those connection points are happening at even greater velocity. We're really excited about the mobile conversion.

Byrnes: For Zillow investors out there, what kind of metrics do you think they should be looking at, as far as how to evaluate the business?

Schwartz: We spend a lot of time talking to investors about the TAM, the total addressable market. In our approach to understanding TAM, we're at a relatively low point right now -- or a youthful point -- in our impact on total transactions.

The thing we look at is, how many leads do we generate? We have upwards of 30,000 Premier Agents. We send them about 15 leads each month. We think about 3% of those, currently, convert to a transaction so we're somewhere between 4 and 5% of the transaction side in the United States today.

There's a ton of leverage, a ton of leverage, if we can use our investment in software and tools and training for our agents to increase that conversion rate from 3% to 4% to 5%. We'll impact more transactions, our agents will be more profitable, they'll spend more on advertising with us, and there's this wonderful self-reinforcing cycle that occurs.

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  • Report this Comment On August 01, 2013, at 12:05 PM, bearsnsox wrote:

    article why zillow's and trulias growth are unimpressive, to give a little balance to Motley Fools biased slant on zillow since they own stock of it

  • Report this Comment On August 01, 2013, at 3:56 PM, bearsnsox wrote:

    just to put in perspective, to show that i think zillow is being pumped and might be dumped, here are some leading "growth company" future P/E's as of right now:

    Zillow: 157

    Tesla: 133

    LinkedIn: 101

    Trulia: 64

    Facebook: 40

    you really think zillow has a better product than tesla, facebook and linked in? keep dreaming its a horrible middle man with low margins

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