Zillow CEO responds to new competition from Facebook and Amazon

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As one of the largest, if not the biggest, players in online real estate listings, Zillow is watching its list of competitors rapidly grow with more and more companies eyeing the potential in the real estate market.

Zillow may dominate the space right now, raking in $266.9 million in revenue in the second-quarter of 2017, but top-producing companies like Amazon and Facebook have recently encroached in Zillow’s territory.

But the small moves from others in the industry to take some of Zillow’s long-standing dominance isn’t enough to scare the CEO.

It is enough, however, for investors to ask Spencer Rascoff, CEO of Zillow Group, about the growing competition. Zillow Group includes brands like Zillow, Trulia,SreetEasy, HotPads, and Naked Apartments.

Slipping in an answer to one more question that was submitted online before wrapping up the earnings call, Rascoff answered the question, “What do you see from Amazon and Facebook in real estate?”

Here’s Rascoff’s full response:

“With respect to Facebook, as I’ve already said, our partnership there is strong and advertisers/agents view us as an effective way to buy Facebook advertisements, more effective than from buying it directly from Facebook. In the case of either of these horizontal players, I do think it’s very difficult for horizontal players to compete with vertical companies that are focused on the vertical and have as big a brand as our family of brands have. And I do think it’s also important to understand how this ad product that we have differs from other ad products. We saw an ad product that connects the consumer with the real estate professional at the time and place that they’re shopping for a specific home. That’s very different from Amazon’s rumored directory of real estate agents or Facebook’s ad product that tries to drive traffic back to a brokerage website. So, a lead generation product that’s tied to a home search is quite different, and I think will always be more attractive to an advertiser than a branding ad product or a product that tries to drive traffic to their website. So those are some of our concluding thoughts on our ability to compete with horizontal players.”

The competition from Amazon is not nearly as concrete as the competition from Facebook.

Back in July, Amazon quietly made a move in to the real estate industry. Tucked into the website’s Home and Business Services section, where users can receive quotes from professionals for various services including assembling new purchases or setting up new technology, Amazon listed a “Hire a Realtor” webpage. But the page wasn’t up long and was taken down the same day HousingWire reported on it.

The announcement from Facebook was a lot more prominent and actually happened shortly before Zillow reported its earnings. Earlier this week, Facebook rolled out Dynamic Ads for Real Estate allow brokers and agents to advertise their listings directly to Facebook and Instagram users who searched for properties on the broker’s website.

An article by Monica Nickelsburg in GeekWire explained that the ads would compete with Zillow’s product, which allows real estate agents to advertise to prospective homebuyers and sellers on its site, according to the article.