Zillow Group (Z 2.18%) (ZG 1.96%) is the biggest player in web-based real estate, dominating the market with almost 75% of mobile real estate searches taking place on its various platforms. But while industry followers may recognize the parent company, less commonly known are the nine brands that actually comprise Zillow.


Image source: Flickr.

Although the company does not break out revenue by brand, the company says that its sales team works with real estate professionals, mortgage brokers, rental professionals, contractors, and display advertisers across all brands to sell advertising services. This provides an attractive level of integrated efficiency in service of its customer base, in addition to the opportunity to sell a fragmented product, which helps optimize revenue and give advertisers more choices.

Consumer-facing teams continue to focus separately on each brand to optimize the experience for the users of each service.

Overview of consumer-facing brands

Zillow's consumer-facing platforms consist of internet-based real estate and rental marketplaces. The brands share a common experience of having migrated the shift from the web to mobile. As of the most recently reported quarter, Zillow Group's combined sites had more than 164 million average monthly unique visitors. Those sites include Zillow, Trulia, HotPads, SteetEasy, and Naked Apartments.

Zillow launched its initial website in Feb. 2006. Zillow Group was incorporated in 2014 in connection with the company's acquisition of competing real estate web pioneer Trulia. Both brands are focused on helping consumers find a home to buy, sell, or rent, and connecting them with professionals to help facilitate the process, including financing and remodeling of the property.

While Zillow began 2015 with 1,200 employees, the Trulia deal increased headcount to 2,000. It is worth noting that the Trulia merger resulted in significant integration challenges as a result of the large size of the deal.

Chart showing rapid rise of Zillow headcount

Data by YCharts.

The other platforms, however, were more incremental additions to the Zlillow Group portfolio. HotPads was acquired in 2012 and is focused on the rental market. Its key feature is an app with a map-based apartment locator. The site boasts over 400,000 properties across the United States and had 19 employees at the time of acquisition.

Meanwhile, StreetEasy is completely focused on New York City and serves buyers, sellers, and renters similar to Zillow and Trulia. It was acquired in 2013 and had 34 employees at the time of acquisition. Naked Apartments was added to the portfolio in Feb. 2016. At the time, it consisted of 13 employees, also with a focus on apartment rentals within New York City, thus complementing the StreetEasy acquisition.

As previously noted, an integrated approach to sales and a fragmented platform allow Zillow Group to maintain an efficient cost structure while maximizing revenue.

Overview of business-facing brands

Zillow Group also owns four business-facing brands: Mortech, Retsly, Dotloop, and Bridge Interactive. Each has its own special role embedding its services within the real estate business community.

Mortech, acquired in 2012, provided tools that were integrated into Zillow's mortgage marketplace to help lenders connect and close loans with millions of customers. Two years later, Zillow acquired Retsly, which normalizes multiple listing service (MLS) data to allow developers to build applications for the real estate industry.

Then, in 2015, Zillow added Dotloop to its portfolio. Dotloop allows the real estate industry to migrate its relationships with clients to the web, removing the friction of document signing, editing, and tracking among multiple parties by putting them online. The tool also has the added benefit of allowing Zillow to track transactions and give feedback to its Premier Agents with data showing how advertising links to more closed sales.

Most recently, the company acquired Bridge Interactive Group in Aug. 2016. Bridge Interactive makes back-office software that helps real estate brokers enter listings into a variety of systems that need access to the information, further simplifying transactions for real estate agents and brokers.

The main theme behind these acquisitions all goes back to making Zillow an easy path for clients to grow their businesses. So while the company has the resources and offerings that smaller players cannot replicate on an individual basis, outsourcing to Zillow becomes an obvious choice.

A clever strategy

By acquiring the various brands complementary to its core business, Zillow Group has created a dominant hub for U.S.-based real estate internet traffic. And by leaving its various consumer-facing platforms intact, the company can attract customers without the need to change their shopping habits. It still allows its sales force to sell access by site or across platforms -- real estate agents can advertise based on their budget and needs.

At the same time, its business brands further integrate themselves into the industry by allowing allowing customers to have a one-stop shop for their various back-office functions.

While it is difficult to ascertain the revenue and profit contribution of each brand, investors can see the synergy that comes from having various real estate professionals working across a wide range of company products and how that effect creates a dynamic that makes it easier to migrate more total real estate spend to the company.

By having a better understanding of the company's approach to its acquisitions and its brand portfolio, the Foolish investor has a clearer picture of how this company is changing the playing field in the real estate industry as all roads lead to Zillow.