Zillow acquires real estate tech firm Diverse Solutions for $7.8M
Popular property portal ups projections for 2011 earnings
By Inman News, Wednesday, November 2, 2011.
Zillow Inc. is acquiring real estate technology provider Diverse Solutions for $7.8 million in cash and stock, the company announced on the same day it reported record third-quarter revenue of $19.1 million.
Irvine, Calif.-based Diverse Solutions provides listings content and powers property searches for real estate agents' websites and mobile platforms. The company's 18 employees serve about 6,000 customers.
Zillow said Diverse Solutions will continue to operate as a branded service, with founder and CEO Justin LaJoie joining Zillow as vice president of industry solutions.
"We're very impressed by the products and team that Diverse Solutions has assembled, and we look forward to offering agents these new solutions for powering their websites and marketing strategies," Zillow CEO Spencer Rascoff said in a statement.
"With this acquisition, Zillow now can offer agents a broad suite of valuable tools to market themselves across the Web and mobile -- whether on their own websites via Diverse Solutions, on Zillow, or across multiple sites via our listings distribution service, Postlets."
In a regulatory filing, Zillow said it paid $5.54 million in cash for the company, and issued 75,000 restricted shares of Zillow stock to Diverse Solutions. The $2.23 million in restricted shares of Zillow stock LaJoie received as part of the acquisition will vest over the next three years.
In a separate announcement, Zillow said it posted a net loss of $570,000 for the third quarter after taking a $1.7 million charge related to its move to a new headquarters facility.
Revenue from "Premier Agent" ads sold to real estate agents and pay-per-click advertising purchased by mortgage lenders who provide loan quotes through the Zillow Mortgage Marketplace was up 226 percent from a year ago, to $11.8 million. Premier Agent subscribers more than doubled from a year ago, to 14,876 at the end of September.
Display-ad revenue was up 57 percent from a year ago, to $7.2 million.
On Monday, Zillow announced a partnership with AOL to integrate its Mortgage Marketplace into AOL's Real Estate and DailyFinance sites. In September, Zillow began powering real estate search for Curbed, the national real estate blog network.
Zillow said it's raising its expectations for 2011 revenue and adjusted earnings, with adjusted earnings before interest, taxes, depreciation and amortization expected to be in the range of $9 million to $10 million, on revenue of $63 million to $64 million.
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Submitted by Matt Carter on November 4, 2011 - 9:20am.
Brian Boero of 1000Watt Consulting thinks brokers are not going to be happy about Zillow getting into the business of providing agents with a search solution -- many brokers view that as their role. Since brokers own listings, and Zillow depends on listings to bring visitors to Zillow.com, Zillow has "jabbed a sleeping dog (brokers) right under the ribs," Boero says.
Submitted by Michael Garcia on November 5, 2011 - 12:14pm.
I think zillow is the worst website when you are looking for 'accurate' information on a specific property. They are so far out in left field that they might have caught the huge homerun by Albert Pujols during the World Series this last month. I have never seen them any closer to accuracy then being 30% of more off. This is just as bad as the CDPE guys wanting all MLS boards to give complete access to the Fed. banks in order to 'so-called' help make the short sale cycle quicker. Not going to happen. This is all a scam to get complete control of our industry and eventually eliminate agents from their ability to sell homes.
Submitted by Michael Garcia on November 5, 2011 - 12:21pm.
Or, how about the time that my friend had looked up his home on zillow and found, much to his surprise, that his home was beinng offered for sale via short sale when in fact it was not in distress nor was it for sale. But when he called to get it removed, zillow would not remove the listing! Lots of false advertising on zillow. I would not recommend the site to anyone.