Zillow CEO Rich Barton announced Tuesday that the company will cover 50 percent of its Premier Agent customers’ next bill, starting March 23rd. The move comes at a time when the industry is slowing down due to the spread of the deadly coronavirus.
Premier Agent is Zillow’s advertising platform for real estate agents, where agents can advertise their services as a buyers’ agent alongside listings on the nation’s most-trafficked real estate search portal. Agents either pay for a certain number of impressions, depending on their ZIP code, or, in some markets, pay a referral fee in exchange for closed leads.
The move also comes against a backdrop of global economic troubles, of which Zillow has not been insulated. While the Dow Jones has plummeted in recent weeks, Zillow’s stock has also taken a hit, falling from a high of more than $65 per share last month, to $28 per share on Tuesday.
Barton, in a letter to shareholders Tuesday, said he estimates the impact of the move on the company’s full-year revenue outlook will be between $40 to $50 million, but the company expects to mitigate the impact through active management of expense levers.
A source at Zillow says the company will reevaluate each month.
Read Barton’s full letter to customers below:
It’s hard to find words to describe what we’re all facing right now. Lives are filled with uncertainty as millions of people are working from home, schools are closed and once customary gatherings and personal interactions are no longer considered safe. Like you, we are evaluating what this means, personally and as a collective, short and long term.
During these intense and uncertain times, we are committed to supporting our Zillow Premier Agents to best serve our shared customers. At Zillow, one of the core values that drives everything we do is “Better Together.” That phrase—and mindset—has never been more true than it is today.
To support you in this valued partnership, we will cover 50% of the cost of your next monthly Zillow bill, beginning March 23.
We’re still seeing home shopping activity—albeit bumpy—through our apps and websites, and while we can’t predict what’s ahead, we want to work with you to help homebuyers and sellers in creative ways as we expect people will continue to shop in this new (virtual) reality.
Our operations teams are moving fast to make the necessary changes to automate this billing process and our team will be reaching out over the next few days and weeks with added resources to help support you and your business.
Thank you for your Zillow Premier Agent partnership. We’re committed to you—through whatever may come our way.
Please stay safe. Never has “home” seemed more important than right now.
Founder & CEO
UPDATE: Story updated with additional information about the expected cost of the action.