For the second year in a row, Rich Barton of Zillow Group (Nasdaq: Z) is our selection for the most powerful person in real estate. After leading the transformation into Zillow 2.0 since returning as CEO in 2019, Barton has navigated Zillow through the Covid-19 crisis to emerge stronger than ever.
Despite suspending iBuyer operations in late March 2020, offering huge discounts to agent advertisers, and dealing with the pandemic in Seattle, which was ground zero for Covid-19 on the West Coast, where Zillow is headquartered, Barton led Zillow Group to record profitability and revenues far beyond expectations in 2020. He did this without a single layoff, a single furlough.
In the third quarter, Zillow Group reported consolidated revenue of $657 million, nearly $100 million higher than the midpoint of its guidance, along with earnings before interest, taxes, depreciation and amortization (EBITDA) of $152 million, roughly twice the midpoint of its guidance for the quarter.
Zillow’s web traffic grew 21 percent in the third quarter from the year previous to 236 million average monthly unique visitors, and shows no sign of slowing down. Indeed, Barton has pointed out throughout 2020 that the pandemic had spurred a spike in interest in and demand for housing as more and more people are forced to work from home and realize just how important home is.
Zillow Group has also been building adjacent services in mortgages, title, and escrow, with stronger revenue and cost management resulting in a consolidated third quarter EBITDA of $16 million for the mortgage segment (a loss of $61 million was initially projected). Again, the growth rates they have seen in these segments are impressive — mortgage grew by over 300 percent in the third quarter 2020 versus the same period in 2019.
And 2020 is when Zillow made news in the real estate industry by becoming an actual consumer-facing brokerage announcing that it would bring its iBuying activities in-house by using its own licensed agents to represent buyers and sellers of homes in the division. At the same time, Zillow announced that it was joining hundreds of MLSs around the country as a full broker participant. Not only that, Zillow will also join NAR as well as state and local Realtor associations, thereby becoming a Realtor brokerage. The nightmares of thousands of Zillow haters came true, and yet, the reaction was relatively muted, suggesting that perhaps Zillow has turned a corner in its relationship with the industry. With iBuying back as of the third quarter, and with over $3.8 billion in cash in the bank, Zillow Group appears ready to pick up right where it left off before pausing.
Simply put, Zillow appears ready to enter 2021, having not only survived the pandemic but thrived throughout it, as the most important and most powerful company in real estate. There are serious competitors on the horizon, with Opendoor returning from the brink, and the entrance of CoStar Group.
As a former Microsoft executive, Barton founded Expedia and successfully spun it off from the software giant as its own public company in 1999. He served as president, CEO, and board director of Expedia from 1999 to 2003. He also co-founded and served as nonexecutive chairman of Glassdoor from 2007 to 2018 and was a venture partner at Benchmark from 2005 until 2018. He’s served on many public company boards and continues to be a board director for Netflix, Qurate, Artsy and Zillow Group. He earned a Bachelor of Science in general engineering: industrial economics from Stanford University.