Zillow chief Spencer Rascoff defends business after stock falls 26 percent: VIDEO
In the last week, Zillow’s share price has fallen more than 26 percent, hitting $27.49 today, after the real estate listings site disclosed a much bleaker earnings forecast for the upcoming fourth quarter.
But Zillow CEO Spencer Rascoff told CNBC that the company remains poised to take advantage of the high volume of real estate advertising migrating from print sources to website and mobile platforms. “Don’t buy Zillow [stock] merely as a way to play the housing upturn, although we benefit from a housing upturn,” Rascoff said. “Buy Zillow if you believe that consumers are going to access more and more real estate information on mobile, where we’re the leader, and on the web, where we’re clearly the leader.”
Although a CNBC news anchor noted that Zillow had lost a quarter of its market capitalization over the last week, Rascoff insisted that his company has retained its value.
Zillow is the largest real estate site in the 20 biggest cities in the U.S., and users have viewed 1 billion homes on Zillow’s mobile application so far this year, Rascoff said. But 99 percent of agents’ advertising budgets are devoted to other websites and offline venues, he said.
“Someone looking at Zillow on a smartphone is actually more likely to contact a real estate agent – who pays us [on] a subscription basis – than someone looking at the same page on the desktop,” Rascoff said. “So the mobile migration is a big boon to our business, unlike so many other Internet companies.”
Additionally, Rascoff noted that the company’s data suggest U.S. housing prices have bottomed out and are set for a 2 percent increase over the next year.
Zillow has been on something of an acquisition tear since the spring, buying up mortgage software company Mortech, home search service Buyfolio and online rental management firm RentJuice. [CNBC] –Leigh Kamping-Carder