The Real Deal New York

StreetEasy brought in $3.4M in first half of 2013

Zillow CEO Spencer Rascoff vows to “fully monetize” NYC site
By Adam Pincus | November 05, 2013 07:40PM

StreetEasy’s revenue for its last half year as an independent firm was $3.4 million, its parent company Zillow reported today in its third-quarter earnings report.

The figure, which covered the first six months of 2013, put the New York City-based listings provider on track to exceed the $5.6 million in revenues it made in 2012, Zillow reported. Its net income for the first half of this year was just $178,000, the company said. In 2012, the 34-employee company generated $790,000 in net earnings, Zillow said.

Seattle-based Zillow, the nation’s largest residential listings website, purchased StreetEasy in August for $50 million. At the time, the financials for StreetEasy, founded in 2005, were not revealed.

Several weeks after buying StreetEasy, in a move that shocked many real estate insiders the company’s co-founder Michael Smith was removed from his CEO position and sidelined with the title chairman, and the firm’s expansion plans in Miami, Washington, D.C. and Philadelphia were terminated. Zillow New York, which includes StreetEasy and related entities, is now run by Susan and Matt Daimler, a married couple and successful tech entrepreneurs.

Zillow’s revenues have risen sharply over the past year. It had record revenues of $53.3 million in the third quarter of 2013, up 67 percent over the same period a year ago. But its net income fell in the last quarter, to a net loss of $1.2 million from a net gain of $2.3 million a year ago.

Spencer Rascoff, Zillow’s CEO, said in the earnings call that his company would seek to grow StreetEasy especially on mobile devices, but underscored that the New York firm was not as profitable as it could be.

“We see very significant revenue opportunities from New York,” Rascoff said. “But [StreetEasy] is not yet fully monetized, and down the road, you can be sure that we will fully monetize it.”

Rascoff also defended Zillow’s data against complaints over a lack of accuracy, noting that its listing accuracy and breadth was better than ever, and that many of those complaints were driven by small firms that don’t list with Zillow.

“You sometimes hear about outliers, small brokerages that with great fanfare decide to not put listings on websites for one reason or another. Those are outliers, they are not the bulk of the industry,” Rascoff said.

Zillow estimates that each year there are residential sales commissions of $1.9 billion earned in the five boroughs of New York, based on $31 billion in resale transactions annually.