“Our aim is to be a genuine digital marketplace, not to have any vested interest that might complicate that,” News Corp CEO Robert Thomson said at Morgan Stanley’s virtual conference. “As you know, with house flipping, Zillow is renovating homes.”
Realtor.com doesn’t want to follow the path that is being blazed by rival Zillow, despite the latter being the market-leading real estate search portal. In fact, Robert Thomson, the CEO of News Corp — the parent company of realtor.com’s operator Move — sees a distinct difference between the two businesses.
“Our aim is to be a genuine digital marketplace, not to have any vested interest that might complicate that,” Thomson said last week at Morgan Stanley’s virtual conference. “As you know, with house flipping, Zillow is renovating homes.”
“Zillow is worrying about which pastels to put in the kitchens, on the wallpaper. What appliances? To bidet or not to bidet, as Shakespeare might not say, in the bathroom. And we’ll leave the unkempt gardens and the ruptured paving stones to Zillow because the revenue may seem higher, but actually, it’s not really revenue, it’s turnover.”
Zillow itself has long-disputed the notion that it’s in the business of flipping homes. But the heart of what Thomson is saying is that realtor.com would not be joining the capital-intensive iBuying space and would be continuing to focus on its lead generation products.
Later in the conversation, he clarified saying that realtor.com doesn’t want to confuse its customers with the contradiction of, “are we providing real estate services to people selling homes? Or are we selling homes?”
Realtor.com has undergone a major facelift in the past year, appointing David Doctorow CEO and elevating leaders from Opcity — a lead referral and nurturing platform Move previously acquired — to key leadership roles.
Lead generation referrals were up 30 percent year-over-year in the second quarter of the fiscal year — the three months ending December 31, 2020 — and Thomson believes there will be an even bigger resurgence in the real estate market when people are more comfortable visiting and inspecting homes first-hand.
“It’s one thing to view online…that’s the start of the real estate relationship, but actually visiting homes, understanding locations is important to families,” Thomson said. “And it’s particularly important to families now as they reconsider their circumstances either to renovate, or to enlarge, to move to another house in that area, or to move to an entirely different area.”
“And we’re very fortunate – there’s a real complementarity between the referral and the lead-gen models where the lead is of the highest quality, it really is naturally a referral,” Thomson added. “And it’s clearly worth more to real estate agents, to realtors.”
Despite Thomson’s insistence that realtor.com is a marketplace — and Zillow is in the real estate market — the two are still competing for eyeballs at the top of the funnel in an increasingly crowded and competitive space. To make sure it’s differentiating itself, Thomson said realtor.com is focused on improving its interface and providing information.
“If you look at realtor.com, you find a lot more economic analysis based really on our origins and DNA in news because you want it to be a holistic real estate experience,” Thomson said.
To that end, Thomson reported that realtor.com has outpaced Zillow in annual percentage increase in unique users for 19 out of the past 21 months.
But realtor.com’s unique users in the second quarter of its fiscal year 2021 reached a monthly average of 80 million. Zillow meanwhile averaged 201 million monthly unique users over the same time period, more than double.
Thomson’s conversation came a month after News Corp’s earnings report, which revealed revenue for Move increased 28 percent to $155 million for the three months ending December 31, 2020. Real estate revenues accounted for 83 percent of Move’s total revenue and grew 30 percent.