Election Blues Won’t Keep Zillow Down
While shares in Zillow (NASDAQ:Z), the operator of the largest real estate information website, fell by 18 percent on Tuesday after the company forecast that fourth-quarter revenue would miss analysts’ expectations, the company still maintains its forward-looking focus.
As competition from the online real estate site Trulia (NYSE:TRLA) increases, Zillow has taken steps to maintain the company’s growth by making acquisitions. The company announced on Monday that it had entered into an agreement to acquire Mortech, a mortgage technology company, for approximately $12 million and 150,000 shares of restricted stock.
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The deal with Mortech will hasten the development of Zillow’s Mortgage Marketplace, the company said in a press release, by providing a subscription-based software that the company hopes will “convert more borrower contacts to funded loans.” Mortech develops productivity tools that are “focused on helping mortgage professionals do a better job at closing deals.”
“In the case of Zillow Mortgage Marketplace, we first innovated on behalf of consumers by creating a transparent marketplace where the borrowers’ needs come first, then we connected borrowers with lenders, and now we are investing in tools to help lenders be even more successful serving consumers,” said the company’s Chief Executive Officer Spencer Rascoff.
Mortech is Zillow’s fifth acquisition in two years, but it is the company’s first in the mortgage sector. Last week, the company announced its purchase of Buyfolio, a platform for customers to search, track, and organize for-sale listings.
Despite the disappointing fourth-quarter projection, Zillow reported on Monday that third-quarter revenue rose 67 percent to $31.9 million, an increase from $19.1 million in the year-ago quarter. The company also swung to a profit, posting net income of $2.33 million after reporting a loss $570,000 a year earlier.
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