Zillow.com - Not to be UnderZestimated

Richard Barton and Lloyd Frink, the team that catapulted Expedia Inc. into the world's largest online travel service and forever changed the travel industry, are at it again with Zillow.com. This time, they're out to change the real estate industry and they're keeping their master plan to themselves, only hinting at what's to come.

Is Zillow.com the "Google of real estate"? Both simultaneously flinch at the suggestion.
"We're trying to be much more than Google," explains Zillow co-founder and president Lloyd Frink. Co-founder, chairman, and chief executive officer Richard Barton defines Zillow as a "media company." "The [user] will be utilizing Zillow in a way that is unlike anything on the Internet today. We're doing stuff that will change the world," Barton says with a sly smile. Heady stuff, but it's simply the Microsoft way of thinking explain the two former executives of Microsoft, the company where both worked until Microsoft spun off Expedia Inc.

The Launch:

Barton and Frink are sitting in Barton's office, 17 stories above the city of Seattle in Zillow's temporary headquarters, which is located in an unremarkable bank building. Still, the office is an inviting setting, with a mini-living room setup with a coffee table, small sofa, and chairs across from Barton's desk. The office is nearly colorless, except for three large full-color portraits that hang over his desk - headshots - of Barton's three young children.

They're relaxed, full of energy and clearly confident as they describe the "tip of the iceberg" or Zillow's debut. In February, after months of speculation and conjecture about what Barton and Frink were up to, Zillow.com debuted. The result unleashed a spate of real estate voyeurism, as literally hundreds of thousands of people looked up the estimated value of their homes, as well as those of their neighbors, friends and colleagues.

"A lot more people than we expected," says Barton, eyes opening wide, admitting that even they were a bit stunned at the response. In its first month of existence, Zillow became one of the top five real estate Internet sites. According to comScore's February rankings, Zillow had nearly 2.8 million unique visitors during its first 20 days of existence. The Seattle-based firm is one of the best-funded new Internet ventures, with more than $32 million in financing secured.

Barton and Frink, who met at Stanford University, have assembled an A-list of 80 employees and counting, as they attempt to repeat their Microsoft magic on the real estate industry. But they caution that their plans pose no threat to replace the real estate brokerage community. "Zillow does not want to be a real estate agent or part of the transaction," states Barton. "We are a media business company" that makes its revenue currently from Internet advertisements, he explains.

Zillow, they stress, is still in its infancy. Both emphasize the "beta" status of their site and acknowledge that many real estate professionals are challenging their online valuations. They are emphatic that the data will only get better. In fact, Frink says firmly that the overriding reason Zillow sought its real estate brokerage licensing was simply to improve the data. "We want to give consumers the best data, and this is one of the ways we can do that," Frink explains.

As Zillow.com more fully unveils itself, Barton believes it will be widely valued and aggressively utilized by the industry and consumers. While the founders are elusive about their ultimate vision for Zillow.com, Barton is very clear what Zillow.com will not do: Zillow.com will not look for a referral fee or in any way seek a percentage of the sales commission. "That business model is unsustainable," Burton opines.

What we do know is that currently Zillow.com is a consumer-centric online real estate service that aggregates "zillions of data points" in an engaging and visual way. Zillow instantly equips consumers with information about what is typically their largest single investment-both financially and emotionally.

Like Google, Zillow is easy to use and doesn't require users to register or provide and personal information. Just enter the home's address, click "go" and if your search matches one of 40 million homes, an instant home valuation estimate will appear graphically, often complete with an aerial shot-and, perhaps, some 3-D-like photos-as well as neighboring homes with their valuations.

The Microsoft Years:

Barton's first home was in Falls Village, Conn., near Hartford. His father's work at Union Carbide resulted in "reassignments" that moved the family around, and they lived in Detroit, Houston, and the Chicago area. Frink's first home was-and current home is-in Seattle. He has strong local family ties to the city's civic leadership that go back several generations. Growing up, both men were computer geeks: Barton had a love for his Tandy TRS-80 and Frink had a passion for imagination games - text-based fantasy games - such as Wizardry.

Frink attended Seattle's exclusive Lakeside School, whose alumni include Bill Gates. Frink interviewed with Gates when he was 13 years old, landed an internship at Microsoft when he was 14 and eventually was hired full-time in 1988. There, he first created Microsoft's "Doodle" program and worked on projects that would evolve into the tablet PC and the pocket PC, before eventually working on Expedia. "I was employee number 40," Frink recalls.

Barton majored in industrial engineering at Stanford, where he met Frink, an economics major. Frink eventually convinced Barton, who became a strategy consultant at Alliance Consulting Group in Boston after college, to put his "big ideas" into practice. Barton packed up his Honda Civic and moved to the West Coast, joining Frink at Microsoft in 1994.
Among Barton's first projects was a CD travel version of Encarta, Microsoft's CD Encyclopedia. In his first product review meeting with Bill Gates, he pitched his Expedia concept. "He loved it," Barton says of Gates' reaction. Like their Microsoft mentors Bill Gates and Steve Ballmer, Barton and Frink complement one another: Barton is gregarious and charismatic, Frink is pensive with an acerbic wit, and together they are brilliant.

Real Estate Options:

Barton and Frink also share the same experience that brought them to the real estate industry: They were both shopping for a new home and found themselves frustrated at how hard it was for a consumer to collect the data needed to make an informed decision. "I had one of these 'Ah-ha!' experiences," recalls Barton, whose mom was a one-time REALTOR. In fact, she was on the team that introduced "Boardwalk," the early code name for Microsoft HomeAdvisor, to the real estate industry an Inman News' first Real Estate Connect in July 1997.

Before the debut of Zillow, Barton and Frink explored myriad online real estate options, with one model using an auction to sell homes at homeauctionweb.com. "We learned that homes you think would sell well on an online auction do, and those you don't think will sell well don't," says Frink. "and the problem is, most homes won't do well."

Barton believes the model was sound, but "consumers are 20 years away from changing their behavior," he says.

Zillow.com's initial success has been viral: It has not spent a single dollar on advertising for the millions of visitors it has reached. Zillow.com, however, is planning to roll out a major advertising campaign. Consumer empowerment is here to stay, they maintain and, as long as you add value to the proposition, so will you.

"Obviously, what we are doing now is understandably causing fear [in the real estate industry] because of our track record," Barton says. "The difference at Expedia was that we were a travel agent - and we did it better than a human travel agent."

That's not going to happen in the real estate space, Barton and Frink agree. "We have to partner with all the players in the industry in order to be successful," Barton says.

Barton and Frink are almost giddy about their confidence in Zillow. Something very big, they hint, is on the near horizon. Barton describes the eventual Zillow experience as an "immersion."

Barton then looks at Frink as he carefully measures his words and explains, "We will create an experience that is highly personalized and allow real estate professionals to engage consumers in an entirely new way," Barton promises.

Being "Zillowed," they emphasize, is just the beginning.

Article provided by Kevin Hawkins. Kevin Hawkins is an award-winning freelance writer who lives on Bainbridge Island, Wash.