Zillow Dodges Google as a Deep Vertical

It hadn’t occurred to me that Zillow and Google were in the same business, but they are both in the information business and make money off of advertising.  Here is a snapshot of Lloyd Frink, President & Co-Founder of www.Zillow.com, speaking this morning at Dean’s Breakfast Lecture Series at the University of Washington.

Lloyd is ultra-aware of Google and at least competes with them for energetic great talent.  Google doesn’t go very deep into vertical markets.  Lloyd points out that 130 people at Zillow wake up every morning focused very deeply on complex real estate transactions.

Zillow is a young company with a mission to empower consumers with real estate tools and information.  They are served 3.7 million consumers in August and still drawing off $57 million venture capital they raised.  Their business model is strictly an advertising play.  He commented that the companies that can win with this model are both the large sites with high volume and the small sites that can take advantage of Google’s Ad-Sense programs.  Lloyd showed a slide that shows how internet advertising spending is disproportionately low compared to the time consumers spend looking at that media:

                                    % Media Consumption             % Media Spend

TV                                           32                                                        43

Newspapers                               8                                                        30

Radio                                       20                                                        13

Internet                                   34                                                          6

Lloyd expects Internet spending to increase, but also individual advertisers. He anticipates a future where half there ad revenue might come from zipcode-specific advertisers.