How Zillow disrupted the real estate industry

Core Insights - Zillow is the leading real estate portal in the U.S. with approximately 250 million unique monthly visitors and offers detailed information on around 165 million homes [1][2] Business Model - Zillow generates revenue by providing leads to real estate agents, taking up to 40% of the commission if the lead results in a sale [3] - In 2024, Zillow reported annual revenues of $2.2 billion, with residential real estate activities accounting for 71% of its revenues [5] Product Offerings - The company features the "Zestimate," a machine learning algorithm that estimates home values, with a median error rate of 2% for active listings and 7.1% for off-market homes [2] - Research indicates that Zestimates can increase seller profits by 4.16% by allowing sellers to set higher prices and wait for buyers who value the property [2] Market Position and Competition - Zillow's strong market position has drawn criticism from competitors, including a lawsuit from Compass challenging Zillow's listing standards [6][7] - The Federal Trade Commission has filed an antitrust lawsuit against Zillow and Redfin over a partnership that could lead to market consolidation in rental listings [8][9] Legal Challenges - Zillow and Compass are set to meet in court regarding the preliminary injunction related to listing requirements [8] - State attorneys general have also filed lawsuits alleging that Zillow's partnership with Redfin could result in higher prices for apartment owners, which may be passed on to renters [9][10]