How do companies like Zillow that are losing millions of dollars a year end up getting valued in the hundreds of millions of dollars?
Why are so many people still investing in these internet companies instead of real businesses or real estate for that matter?
Zillow gathers eyeballs and then advertising those eyeballs but as a vehicle for my flat fee clients listings I have to say I have seen little value. We get far fewer client leads from that site then from a Realtor.com for instance.
My only guess is that people are betting that when the market turns that Zillow will be a big winner but unless they are providing big value to the companies that advertise on their site I don't see how they can make it long term.