Online Real Estate Newbie Zillow A Threat to IACI, HOMS, ZIPR?

Stifel Nicolaus Internet analyst Scott Devitt on newly-launched company Zillow:

Zillow Launches; What does the 10-year chart of your home look like?

• The much anticipated real estate Web site, Zillow.com, launched early this morning. Zillow is a company made up of highly regarded mostly former Expedia and Microsoft executives. Of companies under our coverage, Zillow most closely relates to the realestate.com business at IAC/Interactive (IACI). There are also three companies in the sector we pay attention to but do not have under coverage, SOLD, HOMS, and ZIPR, which are in like businesses. It is important to note Zillow is in beta stage and is a very small player in the sector at the moment but worth paying attention to, in our view. Also, a summary of the company's offering was written up in The Wall Street Journal today, page D1.

• Think of Zillow as Expedia (EXPE) meets the GDS and, in this case, Zillow meets the property appraisers database. On the site, there is information on more than 60 million homes, whether for sale or not. The company plans, eventually, to have fair value estimates on all homes across the United States.

• More than 40 million homes across the U.S. have an unbiased valuation or a Zestimate and some data exist on another 20 million homes. Information granularity includes – (1) historical value changes for each home, charted over the past 1, 5, or 10 years; (2) historical value changes for each home as compared to its surrounding zip code, city, state, or entire U.S.; (3) all comparable home sales in an area; (4) satellite, aerial and parcel view of many homes; and (5) individual home data, such as number of bedrooms/bathrooms, square footage, lot size, stories, and year built.

• Personally, we have high long-term expectations for the real estate sector on the Internet and for the very well-respected group of executives at Zillow. Check out the beta at www.zillow.com.