Google BULLDOZES Zillow's Moat into the Ground (RIP Zestimates?)

Live look at Gemini watching me Google houses I can’t afford for the 5th time this week… 

Well, it appears Zillow has officially woken up to the same very real nightmare that every internet middleman eventually has: Google making you eat sh*t. Shares dumped -9% after word got out that Google is testing real estate listings directly inside search results… a.k.a., the same place where Zillow gets a meaningful chunk of eyeballs in the first place. 

(Source: Giphy) 

We’re talking listings, photos, price, tour request, and agent contacts. All there. No Zestimate® though… and thank gawd for that. Now as for the ones saying “tHiS iS jUsT A TEsT”... yeah, so was Google Flights. So was Google Hotels. So was Google Shopping. How’d that work out for the incumbents? Meaning, this is the part where Zillow insists everything is fine… in the midst of their entire moat being lit on fire. 

(Source: IBD) 

That said, the core issue about this isn’t traffic today. Zillow still has a ton of direct users. The issue is leverage tomorrow. If Google becomes the default place where buyers start… and finish… their home search, Zillow quietly morphs from “platform” to “one of several bidders in Google’s auction.” Ask Yelp how that movie ends. In fact, Goldman straight up said the quiet part out loud: this competes directly with Zillow’s Premier Agent business. That’s the cash cow. That’s the whole thing. If Google is the one handing leads to agents, Zillow’s role gets… awkward fast. 

Adding insult to injury for Zillow, Google doesn’t even need to monetize this aggressively. It just needs to exist. Zillow, Realtor.com, Homes.com… they’ll happily bid against each other for placement like it’s 2014 all over again. Google collects the toll. Everyone else fights to the death in traffic. Meaning, while Zillow isn’t going to zero… yet. It does give it a helluva does of emotional and financial damage. And the market knows it. That’s why $1.6B in market cap evaporated faster than your confidence after checking a Zestimate during a bull market. 

(Source: Pinterest) 

So yeah… Google just entered the chat in real estate. Let’s see how this plays out. Get yo popcorn ready, and place your bets accordingly! Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Google as mentioned in the article.