So Zillow wins an award for being among the "best mid sized companies to work for" according to Glassdoor that gave Zillow a score of 4.2 out of 5. Interesting that Rich Barton is both Chairman of Zillow and Glassdoor, and that only a few weeks ago Zillow CEO Spencer Rascoff started responding to the very flattering employee comments. It all looks stage managed as part of Zillows ego based self publicity campaign. What with the timing of Rascoffs comments on employee posts, and also the way the posts are from Seattle, Lincoln NE, Irvine CA and Seattle as if they were posted specifically to boost the score with Zillow being advised by Barton how to win the award. Just my 2 cents opinion on how it appears to me.
Yes, I am a zillow cynic but nothing would surprise me from what I have observed the way Zillow operates. My experience is a homeowner with a substantially erroneous Zestimate, (there are millions of homeowners in the same boat when 17% of 100 million Zestimates are more than 25% incorrect), and even with such grossly inaccurate valuations Zillow refuse all requests by homeowners to correct or delete inaccurate Zestimates. For what purpose I cannot imagine but they obviously have a motive to behave in such a socially unacceptable way towards homeowners. It is time that our elected officials caught up with the technology and introduced some form of regulation on Zillow to protect homeowners from their Zestimate nonsense.
I wonder how the ex employees who posted the comments in this thread feel abput Zillow being an 'Employees Choice Company' for 2014?
The slump in Unique Users started in September when if fell 8.3%, and dropped a further 2% in October before the massive drop of 5.4 million Users in November. That is 3 months in a row that User numbers have fallen and it will be interesting to see how December fairs. However it does the 4th Quarter Unique Users will be substantially worst than the similar 4th quarter decline in previous years. Additionally according to Alexa only 89,6% of Zillow Users are in the USA and 3.8% are in India and Pakistan where there is no revenue earning potential for Zillow and it begs the question who these Users are?
Well it seems that 17% fewer people are using their Zillow gadget than they did 3 months ago despite a $8.4M nationwide TV Ad campaign.
The articles hit the nail on the head with comments about the differences between the US and Australian real estate market places. Spencer Rascoff also referenced the UK company Rightmove in the same Investor day presentation to substantiate the potential growth prospects for Zillow. Either he is unaware of the differences in the markets or ..... well draw your own conclusions. What does surprise me is that the major Australian investors in Zillow are not more aware of the differences explained by the author in the articles, especially James Packer who bought in at a substantially higher price than Caledonian Investments and must be showing a big loss on his investment.
The problem with Zillow and the nonsense Zestimates that it imposes on over 100 million homes is the fact that over 17% of Zestimates are more than 25% incorrect. If a typical home costs $240,000 that means that the Zestimate could be $60,000 wrong with a valuation of $180,000 published. An even bigger problem is that Zillow refuses to take responsibility for the accuracy of its Zestimates, and refuse ALL requests by homeowners to correct or delete these substantially inaccurate Zestimates.
The time has come for Zillow to be Regulated as it has demonstrated that it cannot be trusted to act in a fair minded way despite the misery and potential financial damage they they inflict on homeowners. As an absolute minimum there should be a DoNotZestimate website so that homeowners can opt out of Zillows nonsense in the same way as 'phone users can use DoNotCall to stop spam 'phone calls.
What Zillow relies on is that most homeowners make a handful of complaints then give up. The answer is NOT to give up but to persue your grievance with Zillow as the more people who do highlight their BS the more chance there is of getting the problem fixed.
So Uniquer User numbers fall for 3 successive months as they slump by 11 million, 17%, since August. Not sure I can see anything good about that and would appreciate how you understand these metrics when this picture was clearly visible for 90 days as consumers tire of Zillows BS Zestimates and stale listings.
Another massive slump in Zillows Unique Users in November with only 52.769 million users compared to very disappointing 58.1 million users in October. That's a whopping 17% drop since August with almost 11 million fewer Unique Users despite a $8.4M nationwide TV Ad campaign to increase 'brand awareness'. This significant fall off in users must be a major embarrassment for CEO Spencer Rascoff who will has glossed over all the warning signals that things were not going well at Zillow. On the 3rd Quarter earnings call he talked of record 3rd quarter Unique Users but used the August number rather than the September numbers which had slumped by 8.3%. Even worst was the exclusion of any reference to equally disappointing October User numbers by releasing that information the day after the call.
Am I surprised by such deceit by a CEO who imposes nonsense and inaccurate Zestimates on over 100 million homes, but refuses to correct or delete the erroneous valuation when brought to his attention? NO, especially when he stated in an email that 'thanks to the First Amendment he can publish any valuation on my home'. I can't imagine the CEO of any other Nasdaq listed company acting so arrogantly as Spencer Rascoff does in how he treats homeowners and creates nothing but misery and potential financial damage in his quest to make himself richer at the expense of homeowners. Maybe consumers are just sick and tired of his Zestimate BS and have lost interest with Zillow and the slump in users is evidence of that.
It is most unlikely that any greedy lawyers read this message board - in fact only a handful few people read these messages. Don't let that put you off, but it means you will have to contact a few high profile class action law firms and demonstrate to then the inequity of how Zillow imposes unwanted and inaccurate Zestimates and refuse all requests by the homeowner to correct. That could well be interpreted as harassment and knowingly causing misery and potential financial damage to the homeowner as a consequence. When you consider how flimsy many class actions are I am very surprised that a Zestimate class action has not been filed. It seems like low hanging fruit for greedy lawyers.
Well, Zillow CEO Spencer Rascoff communicated to me in an email that "thanks to the First Amendment that Zillow can publish any valuation they like on homes as its a matter of opinion". But who knows? maybe if you did sue Zillow in a small claims court you might win the case for the misery and potential financial loss that you suffer from the nonsense zestimate that they impose on your home. When 17% of zestimates are more than 25% inaccurate it is possible that a judge would rule that Zillows incompetence is a form of harassment that no fair minded society is prepared to accept.
According to papers filed in the District Court of Southern Florida a Florida real estate licensee has filed a class action lawsuit alleging that Zillow violated the 22 year old Telephone Consumer Protection Act which forbids any autodialer calls to cellphones. It will be interesting how Zillow responds to the lawsuit as there have been many comments on the Glassdoor website from ex Zillow sales employees about it being a sweatshop on the cold call targets they had to meet or get fired.
Time there was a DoNotZestimate website to give similar protection to homeowners saddled with a nonsense Zestimate that Zillow refuse all requests to correct or delete. When 17% of 100 million Zestimates are more than 25% incorrect then homeowners should have the right to opt out of Zillows BS.
"Nonsense" is too polite a description for Zillows Zestimates. If your read their Bio's, the team that developed the flawed Zestimate algorithm had zero housing experience before their get rich quick gig at Zillow. They then compound that failing by hopeless configuration control of the Zillions of 3rd party data records that they process and, as witnessed yesterday another 'routine update' disaster occurs. I guess I was lucky that my already low balled Zestimate only dropped 3.2% yesterday when I read that yours dropped by nearly 18%.
It does highlight the fact that Zillow claims to be the leading real estate website yet the concept of accuracy is something they they just don't understand with 17% of over 100 million imposed Zestimates being more than 25% incorrect, as published by Clarity Consulting earlier this year. With such appalling accuracy what I don't understand is why Zillow refuse ALL reasonable requests from homeowners to correct or delete the erroneous valuation. What have they to gain from such arrogant behavior towards consumers?
So what was James Packer looking at when he bought Zillow at the peak? The fundamentals or the niche? Seems to me that he is sitting on a substantial loss on his Zillow investment and I am just amazed that he isn't banging on the Z boardroom table demanding representation to protect his investment. Whilst he is at it he needs to tell Spencer Rascoff it is time he stopped imposing BS Zestimates and refusing all requests to correct or delete when homeowners call Zillow out on their nonsense valuations. What value does that bring investors like James Packer when Unique User numbers have slumped over 10% since he made his investment?
But when you have a CEO obsessed with "growing the brand", and the only way to do that is to have hundreds of Inside Sales associates cold calling Realtor's in a desperate attempt to get then to sign up for Zip Codes as Premier Agents then the Sales & Marketing costs keep going up faster than the incremental revenues. Zillows other problem is with Unique Users slumping 8.3% in September and dropping a further 2% in October it will be difficult for them to grow Advertising revenues. Whoever gets appointed to the FP&A role is on a hiding to nothing in that environment.
Seems that the Zillow malaise has spread from Seattle to the new office in Irvine, CA with one ex employee suggesting under the Pros heading "have an exit strategy before you start" , and for Cons "all you can think of".
Yesterday Rich Barton the Zillow Chairman Tweeted " Are you a FP&A god(dess)? killer sr job open". So the penny has finally dropped that costs higher than revenues is a going out of business strategy. Interesting to know what happened to the current Senior Director of Financial Planning and Analysis? Fired or just tired of the 'management narcissism on steroids' that was recently posted on Glassdoor by an ex Zillow employee.
I am amazed that Bloomberg and CNBC interviewers allow Spencer Rascoff get away with this 'investing in the future baloney'. What I see is hype and puffery as Zillow spends money like water especially handing out generous stock options to executives like confetti as they sell them as often as most people get cash from the ATM.
During the 3rd quarter Zillow 'invested' $8M on a nationwide TV Ad campaing and what happened? Unique User numbers fell by 8.3% in September and a further 2% in October. Just to gauge how much public interest there was in the Ad, Zillow had something like 50,000 hits on YouTube, whilst Geicos HumpDay Ad attracted more than 16 million in the same time period.
One has to wonder why Zillow refuse to correct or delete nonsense Zestimates when requested by homeowners to do so, especially when 17% of 100 million Zestimates are more than 25% incorrect. Maybe its these 17 million homeowners who are the biggest group of Users on Zillow as they check out how much more damage Zillow is inflicting on them. There can be no other logical reason why Zillow act in such a socially irresponsible way towards homeowners other than they get some financial benefit from doing so. Let Bloomberg ask that question next time they interview the Z CEO.
With the massive hype of record revenues, record unique users, record this and record that announced on the "history making social media earnings call" Zillow shares jumped significantly in after hours and at the start of next days trading. What Zillow did not communicate was the further decline in Unique users by 2% for October after the massive slump in September. Will we see a repeat of the Shareholders class action filed in November 2012 as those buyers of Z stock after the earnings call and before they published the October Unique user numbers next day. Surely Zillow were aware of the October User numbers before the earnings announcement? and it seems strange that they chose not to make this critical information public. After all it is one of Zillows key metrics.
Well the answer was a resounding NO as Unique Users continued to fall a further 2% in October to 58.1M. The only thing that has increased is the number of Users located in India and Pakistan which rose to 3% or 1.8M. Fascinating that Zillow delayed announcing the October bad news until the day after the history making social media earnings call moderated by The Motley Fool. You would think that Analysts would call out Zillow CEO Spencer Rascoff on this matter, particularly when it was obvious that the $8.4M TV Ad campaign failed miserably as the September and October User number demonstrate.
Zillow has a stellar PE ratio purely on its growth prospects which clearly are not being achieved with 3 successive quarters of declining growth rates User are down over 10% in the past 2 months alone so lets now even talk about growth. Even more important is the clarification on the earnings call by Zillow CEO Spencer Rascoff that Unique Users are NOT unique at all.
If a User accesses Zillow on individual devices then each devise counts as a Unique User. So someone using work computer counts as a user, they also do if they use their home computer, same if they use iPad, and again if they use their iPhone. Net affect is that 'real' unique user 'individuals' could be as little as 15 million people. Also, let's wonder about the 1. 8 million users from India and Pakistan where Zillow has no presence and earns no revenue. Interesting metrics to consider.
And did they publish any analysis or basis of fact to support these price targets? Did they disclose any interest or clients interest? Zillow could just as easy drop back to $20 as investors realise that the stellar PE ratio is unfounded and that Zillow is simply buying revenue by cold calling Realtors in a desperate attempt to sign them up as premier Agents, as recently highlighted by Citron Research.