Originally, Zillow was an advertising business that served as a middleman between real estate professionals and prospective homeowners. As of last July, the company expanded to Zillow Offers, a program wherein homeowners can sell their homes to Zillow. Upon conclusion of the sale, Zillow improves the homes and flips them.
Zillow’s Q2 revenue is almost $600 million, an increase of 84% from last year. However, its losses spiked to $72 million, or an increase of 136% compared to last year. With Zillow’s share price falling 14% after the release of this information, there is growing concern among investors.
It appears that there is a large disparity between demand for Zillow’s services and completed transactions. While many investors believe that Zillow should re-focus on its advertising roots, executives at the company intend to persevere and are introducing an app that will permit purchasers to view homes owned by Zillow without an agent.
Duffy, Clare. Zillow wants to keep cashing in on flipping homes, but first it needs to stop losing money. (August 2019.) Retrieved from https://www.cnn.com/2019/08/07/tech/zillow-earnings-flipping/index.html