initial public offerings (IPOs) trading on American exchanges

Sunday, July 17, 2011

Zillow set to go public this week

Zillow, a popular real-estate database provider launched in December 2004 by Expedia co-founders Richard Barton and Lloyd Frink, is set to go public this week, offering about 3.5 million shares at $16 to $18.

The offering looks to be popular, too; the indicated price was raised Friday from a range of $12 to $14. The deal could value the company at $458 million.

Based in Seattle, Zillow uses proprietary algorithms to produce an estimated value, or "Zestimate," of more than 100 million U.S. homes—maybe even yours. Buyers, sellers and realtors consult it at no cost, as do nosy folks who want to know what the boss just paid for his latest manse.

The company sells display advertising to real-estate and mortgage brokers, and offers subscription-based advertising services to so-called Premier Agents. Subscription-based ads account for much of the recent revenue growth. But the numbers are surprisingly small, given Zillow's cultural buzz. The company generated revenue of $30.5 million in 2010, up from $10.6 million in 2008. Profits are nonexistent, although losses narrowed to $6.8 million last year, from $21 million in '08.

Individuals and businesses that use Zillow have updated information on more than 27 million homes and added more than 50 million home photos. These profiles include detailed information about homes, such as property facts, listing information and purchase and sale data. On April 11, 2011, the Company acquired Postlets, an online real estate listing creation and distribution platform.

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