Zillow Group is a company operating an extensive service for real estate sales and related services. The company's service portfolio is quite broad, including real estate brokerage, valuation, creditworthiness assessment, and comprehensive support for advertisers and contractors. The company was one of the main beneficiaries of speculation in the real estate market in 2020.
However, the company has lost over 55% from its peak, and just in today's session, it fell by 10%. The real estate market in the USA has been cooling regularly for several quarters, which affects the valuations of related business entities. Today's decline, however, is related to the emergence of competition.
Under regular circumstances, attempting to take Zillow's position as a leader would be very difficult due to its market share, brand, and scale effect. However, the niche in which Zillow has settled has found itself in the crosshairs of the worst possible opponent—Google. Alphabet has announced that it is testing its own platform for selling and browsing real estate—which, considering the description of its functionality and operating principles, is to be direct competition for Zillow.
The service doesn't even have a name yet, but the threat is already enormous. Considering Google's track record of market triumphs, everything indicates that it will remain unstoppable. And in this particular case, the potential victim of this will be Zillow. Google has access to data, infrastructure, capital, and talent that surpass Zillow's capabilities by several orders of magnitude.
If Zillow does not undertake a radical reform of its business model to align with Google's aspirations, or if Google itself does not decide to abandon this market, this could be the beginning of the end for the platform.
Z.US (D1)
Source: xStation5
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