WEBVTT 00:00:00.000 --> 00:00:02.279 Welcome back to The Deep Dive. You know, I want 00:00:02.279 --> 00:00:05.360 to start today by talking about a habit I think 00:00:05.360 --> 00:00:08.699 almost everyone has. That late night, maybe I 00:00:08.699 --> 00:00:11.179 should move to Vermont habit. Oh, the real estate 00:00:11.179 --> 00:00:14.519 voyeurism. I know it well. Exactly. Just scrolling 00:00:14.519 --> 00:00:16.420 and scrolling through these incredible houses 00:00:16.420 --> 00:00:19.140 you have absolutely no intention of buying. It's 00:00:19.140 --> 00:00:21.219 a form of entertainment. And for millions of 00:00:21.219 --> 00:00:23.760 people, that experience happens on one specific 00:00:23.760 --> 00:00:25.989 platform. But we're not just talking about the 00:00:25.989 --> 00:00:28.469 app you scroll on. Today, we're looking at the 00:00:28.469 --> 00:00:32.090 absolute machinery behind it, the corporate strategy, 00:00:32.250 --> 00:00:36.369 the tech, the 30 -year history. Who are? We're 00:00:36.369 --> 00:00:39.210 talking about Realtor .com. And what's fascinating 00:00:39.210 --> 00:00:42.049 to me is that if you look at the landscape, they 00:00:42.049 --> 00:00:44.369 had everything. A 10 -year head start on Zillow, 00:00:44.469 --> 00:00:46.929 a complete monopoly on the industry's official 00:00:46.929 --> 00:00:49.170 data feed. And the backing of the National Association 00:00:49.170 --> 00:00:51.850 of Realtors, the NAR, the biggest trade association 00:00:51.850 --> 00:00:55.200 in the country. Yet for so long. they were seen 00:00:55.200 --> 00:00:58.439 as the i don't know the uncool one the runner 00:00:58.439 --> 00:01:01.200 -up it's the classic incumbents dilemma isn't 00:01:01.200 --> 00:01:03.479 it and you're so right to frame it that way on 00:01:03.479 --> 00:01:05.840 the surface yeah it's a property search site 00:01:05.840 --> 00:01:08.180 but when you dig into the source material we've 00:01:08.180 --> 00:01:10.920 pulled for this We're talking corporate filings 00:01:10.920 --> 00:01:13.760 from moving the big acquisition records from 00:01:13.760 --> 00:01:15.920 News Corp, all the strategic documents leading 00:01:15.920 --> 00:01:19.659 up to early 2026. You see, it's really a story 00:01:19.659 --> 00:01:23.379 about a decades long identity crisis. An identity 00:01:23.379 --> 00:01:26.109 crisis. How so? Well, what is it? Is it a tech 00:01:26.109 --> 00:01:28.310 company, morning bread in Silicon Valley? Is 00:01:28.310 --> 00:01:30.569 it a media company, which is what News Corp tried 00:01:30.569 --> 00:01:32.890 to make it? Right. Or is it just a, you know, 00:01:32.909 --> 00:01:34.870 a member service for a trade association? And 00:01:34.870 --> 00:01:37.250 for 30 years, it's been trying to be all three 00:01:37.250 --> 00:01:39.250 at once. And that tension just defines their 00:01:39.250 --> 00:01:41.670 entire history. It's wild. We're looking at a 00:01:41.670 --> 00:01:44.469 company that started in, what, 1995? The absolute 00:01:44.469 --> 00:01:46.769 dawn of the public Internet. It survived the 00:01:46.769 --> 00:01:49.310 dotcom crash, got bought by Rupert Murdoch's 00:01:49.310 --> 00:01:52.209 global media empire. And today it's deploying, 00:01:52.290 --> 00:01:55.129 I mean, actual artificial intelligence to. change 00:01:55.129 --> 00:01:57.109 the fundamental economics of being a real estate 00:01:57.109 --> 00:01:59.290 agent. So that's the mission for this deep dive. 00:01:59.370 --> 00:02:01.450 We're not just reviewing features on an app. 00:02:01.510 --> 00:02:04.980 We're using realtor .com as a case study. Exactly. 00:02:05.000 --> 00:02:08.439 A case study in platform economics, how a completely 00:02:08.439 --> 00:02:11.280 closed protectionist network, which is what it 00:02:11.280 --> 00:02:14.879 was, was basically forced open by the Web and 00:02:14.879 --> 00:02:17.259 how it's now desperately trying to pivot from 00:02:17.259 --> 00:02:19.900 just being a digital billboard for agents to 00:02:19.900 --> 00:02:23.060 something more like a matchmaker for the entire 00:02:23.060 --> 00:02:25.560 transaction. And the scale is just staggering. 00:02:25.639 --> 00:02:27.719 I was looking at the numbers. We're talking 68 00:02:27.719 --> 00:02:32.990 million monthly users. Billions. with a B in 00:02:32.990 --> 00:02:36.169 valuation swings, and a tech stack that's gone 00:02:36.169 --> 00:02:39.569 from grainy JPEG photos to predictive climate 00:02:39.569 --> 00:02:41.889 risk modeling. So yeah, it's a story of digital 00:02:41.889 --> 00:02:44.689 transformation, but it's also a story of huge 00:02:44.689 --> 00:02:46.610 missed opportunities and some incredibly aggressive 00:02:46.610 --> 00:02:49.009 and expensive catch -up strategies. Okay, so 00:02:49.009 --> 00:02:50.729 let's go all the way back. So understand the 00:02:50.729 --> 00:02:52.370 DNA of this company. You have to put yourself 00:02:52.370 --> 00:02:55.229 in 1995. A different world. Totally. Windows 00:02:55.229 --> 00:02:57.469 95 is just launching. Most people are hearing 00:02:57.469 --> 00:02:59.889 a dial -up modem for the first time. And the 00:02:59.889 --> 00:03:01.669 real estate industry is sitting on this absolute 00:03:01.669 --> 00:03:04.490 goldmine of data. But they are, and I think this 00:03:04.490 --> 00:03:06.509 is the right word, they are terrified of sharing 00:03:06.509 --> 00:03:09.090 it. Terrified is exactly the right word. You 00:03:09.090 --> 00:03:10.990 have to understand the power dynamic back then. 00:03:11.430 --> 00:03:14.849 The real estate agent was a gatekeeper, a guardian 00:03:14.849 --> 00:03:17.189 of information. Right. If you wanted to know 00:03:17.189 --> 00:03:20.210 what houses were for sale in your town, what 00:03:20.210 --> 00:03:23.009 did you do? You had to physically go to an office. 00:03:23.449 --> 00:03:26.189 A real estate office. The agent would pull out 00:03:26.189 --> 00:03:30.310 this huge, thick book, the MLS book, or maybe 00:03:30.310 --> 00:03:33.069 log into a green screen terminal that only they 00:03:33.069 --> 00:03:35.810 had access to. The information asymmetry. That 00:03:35.810 --> 00:03:38.310 was their value. It was the entire basis of their 00:03:38.310 --> 00:03:40.430 value proposition. You need me because I have 00:03:40.430 --> 00:03:42.490 the information you can't get. So along comes 00:03:42.490 --> 00:03:44.750 the Internet. This force of radical openness 00:03:44.750 --> 00:03:48.090 and the National Association of Realtors, the 00:03:48.090 --> 00:03:50.629 NAR, they see it as an existential threat. A 00:03:50.629 --> 00:03:53.469 massive threat. So their first move is a defensive 00:03:53.469 --> 00:03:56.250 one. They launched something in 1995 called the 00:03:56.250 --> 00:03:59.349 Realtor Information Network, RIN. But this wasn't 00:03:59.349 --> 00:04:01.590 a website for you and me, was it? No. And this 00:04:01.590 --> 00:04:03.229 is the critical point. This really shows you 00:04:03.229 --> 00:04:06.490 their mindset at the time. RIN was a private 00:04:06.490 --> 00:04:09.110 closed network. Think of it as an intranet, not 00:04:09.110 --> 00:04:11.210 the internet. So it was a tool for realtors to 00:04:11.210 --> 00:04:13.430 talk to other realtors. That's all it was. It 00:04:13.430 --> 00:04:15.969 used the new internet infrastructure, sure. But 00:04:15.969 --> 00:04:18.810 the goal was to help an agent in Chicago send 00:04:18.810 --> 00:04:22.430 listing data to an agent in Miami. It was purely 00:04:22.430 --> 00:04:24.970 business to business. They explicitly, I mean, 00:04:24.970 --> 00:04:26.829 their founding documents say this, they did not 00:04:26.829 --> 00:04:28.949 want the public to see the raw data. Because 00:04:28.949 --> 00:04:31.870 if the consumer has all the data. Then the consumer 00:04:31.870 --> 00:04:34.329 doesn't need the realtor. That was the fear that 00:04:34.329 --> 00:04:36.769 drove the entire strategy. It's the walled guardian 00:04:36.769 --> 00:04:38.889 approach. Build the walls as high as you can. 00:04:39.209 --> 00:04:41.709 100 percent. It was a digital country club. You 00:04:41.709 --> 00:04:44.430 had to be a member of the NAR to get in. But 00:04:44.430 --> 00:04:46.589 here's the problem with building a walled garden 00:04:46.589 --> 00:04:50.430 in 1995. The Internet is basically a giant bulldozer 00:04:50.430 --> 00:04:52.870 designed to knock down walls. Exactly. You already 00:04:52.870 --> 00:04:54.829 had these little third party websites starting 00:04:54.829 --> 00:04:57.629 to pop up. You had individual brokers in, say, 00:04:57.670 --> 00:05:00.389 California who are tech savvy realizing, wait 00:05:00.389 --> 00:05:02.490 a minute, if I put my listings on this new World 00:05:02.490 --> 00:05:05.350 Wide Web thing, my phone rings more. The dam 00:05:05.350 --> 00:05:07.389 was already breaking. So this private network, 00:05:07.509 --> 00:05:10.579 this RIN concept. It's obsolete almost the day 00:05:10.579 --> 00:05:13.480 it launches. Almost immediately. They were trying 00:05:13.480 --> 00:05:16.500 to hold back the ocean. So by 1996, less than 00:05:16.500 --> 00:05:19.860 a year later, they're forced to pivot hard. They 00:05:19.860 --> 00:05:22.439 relaunch. And this time it's a public facing 00:05:22.439 --> 00:05:25.980 website. And this 1996 pivot, that's really the 00:05:25.980 --> 00:05:28.680 birth of the modern real estate portal as we 00:05:28.680 --> 00:05:30.870 know it. It is. And the numbers, I mean, the 00:05:30.870 --> 00:05:32.290 numbers from their own reports, they just tell 00:05:32.290 --> 00:05:35.350 the whole story. In December of 1995, inside 00:05:35.350 --> 00:05:38.610 the private RAN network, they had about 32 ,000 00:05:38.610 --> 00:05:42.430 listings. By October of 1996, after they opened 00:05:42.430 --> 00:05:45.509 the gates to the public, nearly 400 ,000 listings. 00:05:45.730 --> 00:05:49.069 Wait, say that again. From 32 ,000 to 400 ,000. 00:05:49.069 --> 00:05:51.430 In 10 months. That's more than a 10x increase. 00:05:51.550 --> 00:05:53.269 That's not growth. That's an explosion. It was 00:05:53.269 --> 00:05:56.579 an absolute... Data explosion. The second they 00:05:56.579 --> 00:05:58.959 gave the regional MLSs, the multiple listing 00:05:58.959 --> 00:06:01.620 services, a pipeline to feed directly into a 00:06:01.620 --> 00:06:03.939 public site, the content just flooded in. It 00:06:03.939 --> 00:06:05.699 showed how much pent -up supply and demand there 00:06:05.699 --> 00:06:07.300 was. But they had some issues with the branding 00:06:07.300 --> 00:06:09.180 at first, right? I saw this in the notes and 00:06:09.180 --> 00:06:10.819 I couldn't believe it. Oh, the branding mess, 00:06:11.040 --> 00:06:13.579 yes. Before they settled on Realtor .com, they 00:06:13.579 --> 00:06:17.180 briefly called it SpotRealtor .com. SpotRealtor 00:06:17.180 --> 00:06:19.819 .com. What does that even mean? It sounds like 00:06:19.819 --> 00:06:23.019 a website for buying Dalmatians. I think. I think 00:06:23.019 --> 00:06:25.339 the idea was like X marks the spot, you know, 00:06:25.399 --> 00:06:27.939 like you found the spot for real estate. It was 00:06:27.939 --> 00:06:32.759 a very, very 90s Web 1 .0 attempt to be friendly 00:06:32.759 --> 00:06:35.000 and cute. That was amateurish. Deeply amateurish. 00:06:35.439 --> 00:06:37.540 Thankfully, someone with some sense prevailed 00:06:37.540 --> 00:06:39.839 and they dropped the spot by the end of 1996. 00:06:40.879 --> 00:06:43.759 But this whole transition from private network 00:06:43.759 --> 00:06:47.100 to massive public website, it created a huge 00:06:47.100 --> 00:06:49.399 operational problem for them. Which was? The 00:06:49.399 --> 00:06:51.800 NAR is a trade association. They're lobbyists. 00:06:52.060 --> 00:06:54.439 They organize conferences and set professional 00:06:54.439 --> 00:06:57.060 standards. They are not a tech startup. They 00:06:57.060 --> 00:07:00.060 had absolutely no idea how to run a high -traffic, 00:07:00.079 --> 00:07:02.079 consumer -facing website in the middle of the 00:07:02.079 --> 00:07:04.439 dot -com boom. Ah, so this is where the corporate 00:07:04.439 --> 00:07:06.439 structure gets complicated, a complication that, 00:07:06.519 --> 00:07:09.160 frankly, still defines the company today. It 00:07:09.160 --> 00:07:11.199 really does. They realized they couldn't run 00:07:11.199 --> 00:07:13.300 it themselves, so they outsourced it. They handed 00:07:13.300 --> 00:07:15.660 over the operational keys to a tech company called 00:07:15.660 --> 00:07:18.220 Real Select. And Real Select later rebrands as 00:07:18.220 --> 00:07:21.439 HomeStore. Right. And HomeStore eventually becomes 00:07:21.439 --> 00:07:25.240 Move Inc. But the core arrangement was set right 00:07:25.240 --> 00:07:27.759 there in the 90s. And this is the nuance that 00:07:27.759 --> 00:07:31.139 most people miss. Realtor .com is not owned by 00:07:31.139 --> 00:07:34.160 the realtors. It is operated by a for -profit, 00:07:34.199 --> 00:07:37.240 publicly traded tech company under an exclusive 00:07:37.240 --> 00:07:39.339 license from the realtors. That sounds like a 00:07:39.339 --> 00:07:42.160 golden handcuff situation. Explain that. Well, 00:07:42.160 --> 00:07:44.720 the tech company, HomeStore, gets this incredible 00:07:44.720 --> 00:07:47.800 deal. They get the official brand -realtor .com 00:07:47.800 --> 00:07:50.740 -esh. And more importantly, they get the guaranteed 00:07:50.740 --> 00:07:53.810 exclusive data stream from the NAR. That's the 00:07:53.810 --> 00:07:56.290 gold. But the handcuff is that they are forever 00:07:56.290 --> 00:07:59.930 beholden to the rules and the politics of this 00:07:59.930 --> 00:08:02.029 massive trade group. That is the perfect analogy 00:08:02.029 --> 00:08:04.610 for their entire existence. But in the late 90s, 00:08:04.610 --> 00:08:06.689 it felt more gold than handcuff because the money 00:08:06.689 --> 00:08:09.290 was just flowing so freely. Right. The dot -com 00:08:09.290 --> 00:08:11.490 bubble. Peak bubble. HomeStore goes public in 00:08:11.490 --> 00:08:14.709 August of 1999. They raise an incredible $140 00:08:14.709 --> 00:08:18.050 million. And their strategy at the time was fascinating. 00:08:18.329 --> 00:08:20.069 It wasn't about product innovation. It was about 00:08:20.069 --> 00:08:24.240 pure brute force distribution. This was the era 00:08:24.240 --> 00:08:26.660 of the portal wars. The portal wars, exactly. 00:08:27.019 --> 00:08:30.600 Today, if you want traffic, you focus on Google 00:08:30.600 --> 00:08:34.580 SEO or TikTok or whatever. In 1997, the Internet 00:08:34.580 --> 00:08:37.600 was smaller. The on -ramps were the big portals. 00:08:37.620 --> 00:08:41.100 AOL, Yahoo, NBC, USA Today. And if you could 00:08:41.100 --> 00:08:43.259 control the little real estate button on the 00:08:43.259 --> 00:08:46.059 AOL homepage. You controlled the entire market. 00:08:46.120 --> 00:08:48.779 It was digital beachfront property. And HomeStore, 00:08:48.820 --> 00:08:51.679 running realtor .com, went out and... bought 00:08:51.679 --> 00:08:53.600 all of it. They bought it all. They signed an 00:08:53.600 --> 00:08:56.559 exclusive deal with USA Today in 97. Then they 00:08:56.559 --> 00:09:00.080 got NBC. Then came the massive multimillion dollar 00:09:00.080 --> 00:09:02.519 deal to be the exclusive real estate provider 00:09:02.519 --> 00:09:05.639 for AOL. They paid a fortune for these placements. 00:09:05.740 --> 00:09:08.539 The strategy was basically there will be no other 00:09:08.539 --> 00:09:10.659 door to real estate on the Internet. All roads 00:09:10.659 --> 00:09:12.779 lead through us. And for a while, it absolutely 00:09:12.779 --> 00:09:15.620 worked. It created this huge, deep moat around 00:09:15.620 --> 00:09:18.399 their business. By 1999, they had something like 00:09:18.399 --> 00:09:22.179 1 .3 million listings. They were the undisputed 00:09:22.179 --> 00:09:24.379 king of online real estate. No one was even close. 00:09:24.659 --> 00:09:26.419 And to give them some credit, I saw in the source 00:09:26.419 --> 00:09:28.600 material they weren't just sitting on the data. 00:09:28.679 --> 00:09:30.440 They were trying to innovate even back then. 00:09:30.559 --> 00:09:32.299 They were. They were experimenting with virtual 00:09:32.299 --> 00:09:35.899 tours in 1999. I have to stop you there. A virtual 00:09:35.899 --> 00:09:41.399 tour in 1999. Most of us were on screeching 56K 00:09:41.399 --> 00:09:43.860 dial -up modems. Yeah. What did that even look 00:09:43.860 --> 00:09:45.539 like? Was it just a picture that took 10 minutes 00:09:45.539 --> 00:09:48.740 to load? It was probably a series of still photos 00:09:48.740 --> 00:09:52.340 stitched together into a kind of clunky 360 -degree 00:09:52.340 --> 00:09:54.679 panorama that, yes, probably took five minutes 00:09:54.679 --> 00:09:57.559 to load and was incredibly grainy. But the intent 00:09:57.559 --> 00:10:00.080 was there. Even back then, they understood the 00:10:00.080 --> 00:10:02.559 core user need. I want to feel like I'm walking 00:10:02.559 --> 00:10:03.960 through this house, but I don't want to leave 00:10:03.960 --> 00:10:06.240 my chair. It was visionary, even if the tech 00:10:06.240 --> 00:10:09.559 wasn't quite ready. They enter the 2000s as the 00:10:09.559 --> 00:10:14.399 dominant player. Unbeatable. But then the world 00:10:14.399 --> 00:10:16.659 changes. The bubble bursts. The dot -com bubble 00:10:16.659 --> 00:10:18.799 bursts. Home store stock collapses. There's a 00:10:18.799 --> 00:10:21.740 huge accounting scandal. It was a mess. And then 00:10:21.740 --> 00:10:24.320 after that, new competitors start to emerge from 00:10:24.320 --> 00:10:26.379 the ashes. Competitors who learned from Realtor 00:10:26.379 --> 00:10:29.279 .com's mistakes. Exactly. Zillow launches in 00:10:29.279 --> 00:10:32.039 2006. Trulia launches around the same time. And 00:10:32.039 --> 00:10:34.559 suddenly, just having the official data isn't 00:10:34.559 --> 00:10:36.200 enough of a selling point. Right, because now 00:10:36.200 --> 00:10:38.100 you need a good user experience. You need something 00:10:38.100 --> 00:10:40.159 to keep people coming back. You need the Zestimate. 00:10:40.360 --> 00:10:43.320 And that's the killer. The Zestimate was this 00:10:43.320 --> 00:10:46.120 addictive, controversial, but brilliant tool 00:10:46.120 --> 00:10:49.450 that gave consumers a number. An automated valuation. 00:10:49.809 --> 00:10:52.070 And Realtor .com couldn't do that. They couldn't 00:10:52.070 --> 00:10:54.850 because of those golden handcuffs. Their partner, 00:10:55.009 --> 00:10:57.909 the NAR, is made up of agents who believe they 00:10:57.909 --> 00:10:59.409 are the ones who should tell you what your house 00:10:59.409 --> 00:11:02.470 is worth. They hate automated valuations. They 00:11:02.470 --> 00:11:04.669 see it as a threat. So while Zillow is giving 00:11:04.669 --> 00:11:07.730 consumers this fun new toy, Realtor .com is stuck. 00:11:07.889 --> 00:11:10.590 They can't innovate in the same way without angering 00:11:10.590 --> 00:11:13.110 their partners. They completely lost the cool 00:11:13.110 --> 00:11:16.789 war. Zillow became the fun place to dream. Realtor 00:11:16.789 --> 00:11:20.129 .com was seen as the boring utilitarian tool. 00:11:20.309 --> 00:11:22.470 Which brings us to the next major chapter, the 00:11:22.470 --> 00:11:24.649 rescue operation, or I guess the acquisition. 00:11:24.909 --> 00:11:27.490 Let's fast forward to 2014. Right. So the company 00:11:27.490 --> 00:11:29.870 has survived the 2008 housing crash. It's treading 00:11:29.870 --> 00:11:33.009 water, but it's clearly losing mindshare to Zillow, 00:11:33.009 --> 00:11:35.049 which had just bought Trulia. They were falling 00:11:35.049 --> 00:11:38.669 behind. Enter News Corp. September 2014, Rupert 00:11:38.669 --> 00:11:40.350 Murdoch's News Corp announces it's acquiring 00:11:40.350 --> 00:11:43.210 Move Inc., the parent company of Realtor .com, 00:11:43.330 --> 00:11:47.429 for $950 million. Nearly a billion dollars. Now, 00:11:47.490 --> 00:11:51.379 my first thought is, why? News Corp is the Wall 00:11:51.379 --> 00:11:53.639 Street Journal, Fox News, the New York Post, 00:11:53.899 --> 00:11:56.539 HarperCollins Books. They're a media and publishing 00:11:56.539 --> 00:11:59.120 empire. Why buy a real estate listing website? 00:11:59.519 --> 00:12:01.740 It's a great question. And the answer is that 00:12:01.740 --> 00:12:04.360 the single most profitable part of old school 00:12:04.360 --> 00:12:07.740 newspapers was the classified section. Ah, the 00:12:07.740 --> 00:12:10.460 ads for jobs, cars, and houses. The rivers of 00:12:10.460 --> 00:12:13.580 gold. As the newspaper business died, all that 00:12:13.580 --> 00:12:16.299 revenue moved online. News Corp understood that 00:12:16.299 --> 00:12:18.519 business model better than anyone, and they weren't 00:12:18.519 --> 00:12:20.460 new to it. They already owned a company called 00:12:20.460 --> 00:12:22.820 REA Group in Australia, which is the dominant 00:12:22.820 --> 00:12:25.100 real estate portal there. They knew the playbook. 00:12:25.259 --> 00:12:27.820 So they looked at Realtor .com in the U .S. and 00:12:27.820 --> 00:12:32.179 saw what? An undervalued asset. A sleeping giant. 00:12:32.299 --> 00:12:35.159 It had the audience at the time around 34 million 00:12:35.159 --> 00:12:37.960 unique monthly visitors. But it was, in their 00:12:37.960 --> 00:12:41.019 view... seriously under -monetized. They believe 00:12:41.019 --> 00:12:42.740 they could apply their media savvy and their 00:12:42.740 --> 00:12:44.840 ad tech knowledge to make it much more profitable. 00:12:45.000 --> 00:12:46.759 And there's another angle too, right? The data 00:12:46.759 --> 00:12:48.960 angle. If you're a news corp and you want to 00:12:48.960 --> 00:12:51.620 sell targeted ads for, say, the Wall Street Journal's 00:12:51.620 --> 00:12:54.000 real estate section, or for Barron's. Knowing 00:12:54.000 --> 00:12:56.720 exactly who is in the market for a $2 million 00:12:56.720 --> 00:13:00.279 home and a specific zip code is incredibly valuable 00:13:00.279 --> 00:13:03.340 data. It's a high intent signal. What do you 00:13:03.340 --> 00:13:05.480 mean by that? Well, if someone is browsing on 00:13:05.480 --> 00:13:07.679 Realtor .com, they're not just passively killing 00:13:07.679 --> 00:13:11.279 time. They are signaling their intent to make 00:13:11.279 --> 00:13:13.720 the biggest purchase of their life. That means 00:13:13.720 --> 00:13:16.299 they're also about to spend a ton of money on 00:13:16.299 --> 00:13:18.759 mortgages, insurance, moving trucks, furniture, 00:13:19.019 --> 00:13:21.820 appliances, you name it. News Corp wanted to 00:13:21.820 --> 00:13:24.720 own that signal and build an advertising ecosystem 00:13:24.720 --> 00:13:27.200 around it. And based on the financial analysis 00:13:27.200 --> 00:13:29.740 from that time. Wall Street completely bought 00:13:29.740 --> 00:13:32.539 the story. By 2016, just two years after News 00:13:32.539 --> 00:13:35.720 Corp bought it for $950 million, Morgan Stanley 00:13:35.720 --> 00:13:39.200 valued the company at $2 .5 billion. It's a staggering 00:13:39.200 --> 00:13:41.200 jump in value. How do you do that? How do you 00:13:41.200 --> 00:13:43.860 more than double the value of a company in just 00:13:43.860 --> 00:13:46.000 24 months? What did they actually do? They went 00:13:46.000 --> 00:13:48.299 on the offensive. For years, they had been playing 00:13:48.299 --> 00:13:51.039 defense against Zillow. Under News Corp, they 00:13:51.039 --> 00:13:52.899 found a new message. They stopped trying to be 00:13:52.899 --> 00:13:55.080 cool and started hammering the idea of accuracy. 00:13:55.500 --> 00:13:58.039 Leaning into the one big advantage. Exactly. 00:13:58.259 --> 00:14:00.860 Zillow and Trulio were fun, but their data could 00:14:00.860 --> 00:14:03.059 be messy. You'd see a house listed for sale that 00:14:03.059 --> 00:14:06.220 had actually sold two weeks ago. So Realtor .com's 00:14:06.220 --> 00:14:08.220 marketing became all about its direct connection 00:14:08.220 --> 00:14:10.879 to the MLSs. They started running ads saying, 00:14:11.000 --> 00:14:12.919 we have the most accurate up -to -the -minute 00:14:12.919 --> 00:14:16.039 data. By 2016, they were claiming to display 00:14:16.039 --> 00:14:19.500 97 % of all listed residential properties in 00:14:19.500 --> 00:14:21.860 the U .S. So the new pitch to the consumer was 00:14:21.860 --> 00:14:25.139 essentially, Zillow is for dreaming, but Realtor 00:14:25.139 --> 00:14:27.879 .com is for buying. That's a perfect way to put 00:14:27.879 --> 00:14:30.820 it. When you're serious, you come to us. That 00:14:30.820 --> 00:14:33.059 positioning resonated with serious buyers and 00:14:33.059 --> 00:14:35.240 agents and it helped them claw back a lot of 00:14:35.240 --> 00:14:37.779 ground. And behind the scenes, they were revamping 00:14:37.779 --> 00:14:39.860 the ad technology, optimizing the monetization 00:14:39.860 --> 00:14:41.700 engine, which is just corporate speak for getting 00:14:41.700 --> 00:14:44.019 more money out of agents for leads. You know, 00:14:44.039 --> 00:14:47.360 during this period of intense change, the leadership 00:14:47.360 --> 00:14:50.039 seems to be a revolving door. Yeah. Which feels 00:14:50.039 --> 00:14:52.860 telling. It does. You had Ryan O 'Hara as CEO 00:14:52.860 --> 00:14:55.919 of MoveInRealtor .com until 2019, then an acting 00:14:55.919 --> 00:14:59.059 CEO, Tracy Fellows. Then in 2020, David Doctorow 00:14:59.059 --> 00:15:01.980 comes in. Then he's replaced in mid -2023 by 00:15:01.980 --> 00:15:04.639 Damian Eels. That's four leaders in about four 00:15:04.639 --> 00:15:08.059 years. That signals a lot of instability, or 00:15:08.059 --> 00:15:10.039 at least a lot of searching for the right strategy. 00:15:10.259 --> 00:15:13.039 I think so. And each leader brought a very different 00:15:13.039 --> 00:15:15.639 background. Dr. Rowe came from consumer tech 00:15:15.639 --> 00:15:18.919 eBay Expedia. He was all about improving the 00:15:18.919 --> 00:15:21.960 user experience on the app. Eels, the current 00:15:21.960 --> 00:15:24.960 CEO, came up through the News Corp side in Australia. 00:15:25.500 --> 00:15:28.039 He's much more focused on the industry relationships 00:15:28.039 --> 00:15:30.000 and the business to business side of things. 00:15:30.220 --> 00:15:31.840 And it wasn't just the leadership that moved. 00:15:32.100 --> 00:15:34.980 The company itself physically relocated. Yeah. 00:15:35.059 --> 00:15:37.159 They started in San Jose. Right. The heart of 00:15:37.159 --> 00:15:39.059 Silicon Valley. Right. Then moved to a bigger 00:15:39.059 --> 00:15:43.039 campus in Santa Clara in 2016. But the big symbolic 00:15:43.039 --> 00:15:46.899 move was the recent one. In early 2025, it was 00:15:46.899 --> 00:15:49.019 reported they were officially moving the corporate 00:15:49.019 --> 00:15:51.860 headquarters to Austin, Texas. From Silicon Valley 00:15:51.860 --> 00:15:54.840 to the Silicon Hills. It's symbolic on so many 00:15:54.840 --> 00:15:56.980 levels. One, it's obviously cheaper, a big trend 00:15:56.980 --> 00:15:59.539 in tech. Two, it gets them out of that competitive, 00:15:59.720 --> 00:16:02.600 insular Silicon Valley bubble. But the third 00:16:02.600 --> 00:16:05.519 reason is the most important strategically. Their 00:16:05.519 --> 00:16:08.000 single biggest acquisition, a company called 00:16:08.000 --> 00:16:11.220 Opsity, is based in Austin. Moving the headquarters 00:16:11.220 --> 00:16:13.700 there was a massive signal to the market and 00:16:13.700 --> 00:16:16.320 to their employees that the Op City business 00:16:16.320 --> 00:16:19.179 model isn't just a part of the company. It is 00:16:19.179 --> 00:16:21.559 the future of the company. OK, we have to get 00:16:21.559 --> 00:16:23.259 to Op City. But before we get to the business 00:16:23.259 --> 00:16:25.240 model, let's talk about the product itself, the 00:16:25.240 --> 00:16:27.960 tech stack. Because if you open the Realtor .com 00:16:27.960 --> 00:16:31.600 app today versus, say, 10 years ago, the sheer 00:16:31.600 --> 00:16:33.860 depth of information is almost overwhelming. 00:16:34.120 --> 00:16:36.200 It's become a risk assessment engine. That's 00:16:36.200 --> 00:16:38.120 one of the most fundamental shifts in the entire 00:16:38.120 --> 00:16:40.259 prop tech industry. It's so much. more than just 00:16:40.259 --> 00:16:42.559 beds, baths, and square feet now. I mean, let's 00:16:42.559 --> 00:16:45.059 go through some of these features. In 2019, they 00:16:45.059 --> 00:16:47.779 added the commute time filter. Okay, that's practical. 00:16:47.860 --> 00:16:50.480 I get it. Useful, for sure. But then in 2020, 00:16:50.759 --> 00:16:53.860 they roll out the noise overlay map. The noise 00:16:53.860 --> 00:16:55.720 map is just fascinating to me. It's not just 00:16:55.720 --> 00:16:58.360 a guess. It aggregates real data from traffic 00:16:58.360 --> 00:17:00.980 sensors, from airport flight paths, from business 00:17:00.980 --> 00:17:04.339 density, and it creates this literal heat map 00:17:04.339 --> 00:17:07.160 of sound levels across a neighborhood. So I can 00:17:07.160 --> 00:17:09.799 see block by block. If my dream house is going 00:17:09.799 --> 00:17:12.339 to be quiet or if it's right next to a highway, 00:17:12.440 --> 00:17:15.180 I didn't notice on the map. Exactly. It's addressing 00:17:15.180 --> 00:17:18.099 a very specific and very common buyer anxiety. 00:17:18.480 --> 00:17:20.519 What if I move in and I can't sleep because it's 00:17:20.519 --> 00:17:23.200 too loud? It's a quality of life metric that 00:17:23.200 --> 00:17:25.930 an agent might, you know. conveniently forget 00:17:25.930 --> 00:17:27.849 to mention. But then it gets even more intense. 00:17:28.109 --> 00:17:31.289 This is what I call the liability layer. In 2020, 00:17:31.549 --> 00:17:35.769 they add a flood risk tool and in 2022, a wildfire 00:17:35.769 --> 00:17:38.069 risk tool. And this is where that tension we 00:17:38.069 --> 00:17:40.470 talked about between serving the consumer and 00:17:40.470 --> 00:17:43.109 serving the agent. gets white hot. These tools 00:17:43.109 --> 00:17:45.170 weren't developed in -house, were they? No. And 00:17:45.170 --> 00:17:47.150 that's important. They partnered with a nonprofit 00:17:47.150 --> 00:17:49.210 research group called the First Street Foundation. 00:17:49.569 --> 00:17:52.170 These aren't just simple ratings. They use complex 00:17:52.170 --> 00:17:54.670 climate models to project the risk of a flood 00:17:54.670 --> 00:17:57.309 or a wildfire over the lifetime of a 30 -year 00:17:57.309 --> 00:17:59.990 mortgage. That's a frankly terrifying timeline 00:17:59.990 --> 00:18:02.059 to consider when you're looking at a house. It 00:18:02.059 --> 00:18:04.839 is. The tool will literally show you that a house 00:18:04.839 --> 00:18:08.480 might be perfectly dry today, but has a, say, 00:18:08.579 --> 00:18:10.920 40 percent chance of being a severe flood zone 00:18:10.920 --> 00:18:14.339 by the year 2045 or that its wildfire risk is 00:18:14.339 --> 00:18:16.680 rated extreme. So here's the billion dollar question. 00:18:17.259 --> 00:18:19.920 Why would a platform whose entire business model 00:18:19.920 --> 00:18:22.420 depends on agents successfully selling houses 00:18:22.420 --> 00:18:26.400 put a giant, scary red warning label on half 00:18:26.400 --> 00:18:28.940 of their inventory? Doesn't that just kill deals? 00:18:29.380 --> 00:18:31.380 Oh, it absolutely kills some deals. I guarantee 00:18:31.380 --> 00:18:33.480 you there are thousands of real estate agents 00:18:33.480 --> 00:18:35.900 who loathe these features, who see a sale fall 00:18:35.900 --> 00:18:38.279 apart because a buyer gets spooked by a flood 00:18:38.279 --> 00:18:40.920 factor score of 8 out of 10. Why do it? Because 00:18:40.920 --> 00:18:44.079 Realtor .com, under News Corp, made a very deliberate 00:18:44.079 --> 00:18:47.000 strategic calculation. They decided... that in 00:18:47.000 --> 00:18:49.720 an era of increasing climate risk, not showing 00:18:49.720 --> 00:18:52.319 the data was a bigger long -term liability than 00:18:52.319 --> 00:18:54.599 showing it. A liability in what sense? Legal? 00:18:54.920 --> 00:18:57.619 Partly legal, maybe, but mostly a liability of 00:18:57.619 --> 00:18:59.859 trust. Think about it. If you buy a house through 00:18:59.859 --> 00:19:01.640 their platform and it floods a year later and 00:19:01.640 --> 00:19:03.500 you find out that they had access to that risk 00:19:03.500 --> 00:19:05.359 data but chose to hide it from you to help the 00:19:05.359 --> 00:19:07.400 agent make a sale, you will never trust that 00:19:07.400 --> 00:19:09.720 brand again. So they chose long -term consumer 00:19:09.720 --> 00:19:13.009 trust over short -term sales velocity. Precisely. 00:19:13.029 --> 00:19:15.670 It fundamentally shifts the psychology of the 00:19:15.670 --> 00:19:17.910 user. You go from browsing and thinking, oh, 00:19:17.970 --> 00:19:21.170 look at that beautiful breakfast nook, to, hmm. 00:19:21.660 --> 00:19:24.660 Look at that flip factor score. It forces a much 00:19:24.660 --> 00:19:28.220 more sober, rational financial decision. It turns 00:19:28.220 --> 00:19:31.079 the platform from what was basically a marketing 00:19:31.079 --> 00:19:34.299 brochure into more of a due diligence tool. That's 00:19:34.299 --> 00:19:36.339 the perfect description. And in the long run, 00:19:36.420 --> 00:19:38.880 that's a much more defensible and valuable position 00:19:38.880 --> 00:19:40.859 to be in. OK, so on the flip side of all that 00:19:40.859 --> 00:19:43.640 scary data, they also invested heavily in the, 00:19:43.740 --> 00:19:45.680 you know, the fund immersive tech. Right. It 00:19:45.680 --> 00:19:48.160 wasn't all doom and gloom. Starting around 2017, 00:19:48.500 --> 00:19:50.220 they really pushed into things like augmented 00:19:50.220 --> 00:19:53.740 reality. and integrating Matterport 3D tour technology. 00:19:53.920 --> 00:19:55.940 The 3D walkthroughs, I feel like those became 00:19:55.940 --> 00:19:58.180 ubiquitous overnight. They were around before, 00:19:58.299 --> 00:20:01.119 but the pandemic in 2020 was the huge accelerator. 00:20:01.579 --> 00:20:04.099 Suddenly, you couldn't do in -person open houses. 00:20:04.960 --> 00:20:08.240 The 3D tour went from a cool, nice -to -have 00:20:08.240 --> 00:20:11.920 feature to an absolute essential. And Realtor 00:20:11.920 --> 00:20:13.839 .com was well -positioned because they had already 00:20:13.839 --> 00:20:16.900 done the work to integrate that tech into their 00:20:16.900 --> 00:20:19.619 iOS and Android apps. It's all about engagement, 00:20:19.720 --> 00:20:22.240 right? The longer I spend walking through a virtual 00:20:22.240 --> 00:20:24.849 house on their app... The more likely you are 00:20:24.849 --> 00:20:27.130 to contact an agent through their system, the 00:20:27.130 --> 00:20:29.349 more data they have on what you like. Matterport 00:20:29.349 --> 00:20:31.529 scans are more than just a video. It's spatial 00:20:31.529 --> 00:20:33.970 data. You can digitally measure rooms, see the 00:20:33.970 --> 00:20:36.529 floor plan in a new way. It just removes a layer 00:20:36.529 --> 00:20:38.789 of uncertainty before you even bother to visit 00:20:38.789 --> 00:20:41.450 in person. So we've got the history, we've got 00:20:41.450 --> 00:20:43.970 the tech, but let's follow the money. This is 00:20:43.970 --> 00:20:46.150 the part I think most users completely misunderstand. 00:20:46.369 --> 00:20:49.470 The app feels free to use. But this is a multi 00:20:49.470 --> 00:20:51.809 -billion dollar business. Yeah. How does the 00:20:51.809 --> 00:20:54.289 cash actually flow? Right. First and most important 00:20:54.289 --> 00:20:57.309 thing to clarify, Realtor .com is not a brokerage. 00:20:57.349 --> 00:20:59.809 They don't employ Realtor .com agents in the 00:20:59.809 --> 00:21:02.170 same way a company like Redfin has its own agents. 00:21:02.329 --> 00:21:05.119 They're a middleman, a marketplace. They are 00:21:05.119 --> 00:21:08.440 a lead generation platform. And historically, 00:21:08.700 --> 00:21:11.259 the business model was very simple. It was basically 00:21:11.259 --> 00:21:14.180 pay to play. You mean an agent would literally 00:21:14.180 --> 00:21:17.019 just buy a zip code? Essentially, yes. It was 00:21:17.019 --> 00:21:19.779 a subscription advertising model. An agent would 00:21:19.779 --> 00:21:23.819 pay Realtor .com, say, $500 a month. And in return, 00:21:24.099 --> 00:21:26.559 their face and phone number would be featured 00:21:26.559 --> 00:21:29.559 next to all the listings in the 90210 zip code. 00:21:30.109 --> 00:21:32.670 And realtor .com got paid whether that agent 00:21:32.670 --> 00:21:35.049 ever sold a house or not. Exactly. They got paid 00:21:35.049 --> 00:21:37.130 for the advertising space, for the exposure. 00:21:37.430 --> 00:21:39.130 It didn't matter if the leads they sent were 00:21:39.130 --> 00:21:41.690 any good. That sounds like a great deal for realtor 00:21:41.690 --> 00:21:44.630 .com. But maybe not so great for the agent who's 00:21:44.630 --> 00:21:47.049 paying $500 for a bunch of junk leads from people 00:21:47.049 --> 00:21:49.670 just daydreaming. That was the problem. That 00:21:49.670 --> 00:21:51.630 was why the model started to break down as the 00:21:51.630 --> 00:21:53.650 market got more competitive. Agents were complaining 00:21:53.650 --> 00:21:55.950 constantly that they were paying for click kickers 00:21:55.950 --> 00:21:58.210 or looky -loos, people who aren't serious buyers. 00:21:58.470 --> 00:22:00.529 And consumers were complaining that they'd click 00:22:00.529 --> 00:22:02.529 the contact agent button and either never hear 00:22:02.529 --> 00:22:04.769 back or get a call from an agent who knew nothing 00:22:04.769 --> 00:22:07.690 about the specific property. The system was broken. 00:22:07.970 --> 00:22:10.210 The incentives were misaligned. Totally. So they 00:22:10.210 --> 00:22:12.619 had to pivot the entire business model. And this 00:22:12.619 --> 00:22:15.720 is where that Austin based acquisition, Opsity, 00:22:15.859 --> 00:22:18.640 becomes the absolute center of the universe for 00:22:18.640 --> 00:22:20.460 them. OK, so this is the big one. They bought 00:22:20.460 --> 00:22:24.359 Opsity in 2018 for $210 million. You said it 00:22:24.359 --> 00:22:26.160 wasn't an ad platform, but a lead conversion 00:22:26.160 --> 00:22:29.039 platform. Break that down for us. Right. So lead 00:22:29.039 --> 00:22:32.140 generation, the old model, is just here's a name 00:22:32.140 --> 00:22:34.380 and a phone number. Good luck. Lead conversion 00:22:34.380 --> 00:22:38.480 is what Opsity does. Now, when you're on Realtor 00:22:38.480 --> 00:22:40.940 .com and you click that contact agent button. 00:22:41.509 --> 00:22:44.529 Your request doesn't just go to some random agent 00:22:44.529 --> 00:22:46.589 who paid for the zip code. Where does it go? 00:22:47.109 --> 00:22:49.690 It's intercepted by Opsity's system. They use 00:22:49.690 --> 00:22:52.410 a combination of AI and a human call center to 00:22:52.410 --> 00:22:54.990 contact you, often within seconds. They call 00:22:54.990 --> 00:22:56.750 you and they ask qualifying questions. Hi, are 00:22:56.750 --> 00:22:58.690 you working with an agent already? Have you been 00:22:58.690 --> 00:23:00.690 pre -approved for a mortgage? Are you ready to 00:23:00.690 --> 00:23:03.009 tour homes this week? They scrub the lead. They 00:23:03.009 --> 00:23:05.980 qualify it. They scrub and qualify the lead until 00:23:05.980 --> 00:23:08.819 it's red hot. Only then, once they've confirmed 00:23:08.819 --> 00:23:11.819 you are a serious ready to transact buyer, do 00:23:11.819 --> 00:23:15.079 they pass you on to an agent. But here's the 00:23:15.079 --> 00:23:17.960 revolutionary part. They don't just pass it to 00:23:17.960 --> 00:23:20.869 any agent. They use an algorithm. They use a 00:23:20.869 --> 00:23:22.970 matching algorithm. It looks at all the agents 00:23:22.970 --> 00:23:25.009 in their network and gives the lead to the one 00:23:25.009 --> 00:23:27.470 who has the best track record for closing deals 00:23:27.470 --> 00:23:30.789 on that type of property in that specific neighborhood 00:23:30.789 --> 00:23:33.230 at that price point. So it's performance based. 00:23:33.390 --> 00:23:37.509 And how does Realtor .com get paid in this new 00:23:37.509 --> 00:23:39.670 model? This is the crucial part. They get paid 00:23:39.670 --> 00:23:41.799 with a referral fee. They've completely changed 00:23:41.799 --> 00:23:43.920 the economics. They tell the agent, we are not 00:23:43.920 --> 00:23:45.700 going to charge you a single dollar up front 00:23:45.700 --> 00:23:47.700 for this lead. We are giving you this highly 00:23:47.700 --> 00:23:50.920 qualified, ready to buy customer for free. But 00:23:50.920 --> 00:23:53.359 T, if and when you close the deal with this client, 00:23:53.559 --> 00:23:56.039 you owe us a percentage of your commission. What 00:23:56.039 --> 00:23:57.559 kind of percentage are we talking about? It can 00:23:57.559 --> 00:24:00.779 be 30, 35, sometimes even 40 percent of the agent's 00:24:00.779 --> 00:24:03.740 commission on that sale. Wow. That is a massive 00:24:03.740 --> 00:24:05.940 shift. They've gone from selling billboard ads 00:24:05.940 --> 00:24:08.859 to taking a direct cut of the actual transaction. 00:24:09.390 --> 00:24:13.089 It completely realigns the incentives. Now, Realtor 00:24:13.089 --> 00:24:15.569 .com only makes the big money if the agent is 00:24:15.569 --> 00:24:18.609 successful and the house actually sells. It forces 00:24:18.609 --> 00:24:20.829 them to focus on the quality of the match, not 00:24:20.829 --> 00:24:23.289 just the quantity of clicks. And I imagine it 00:24:23.289 --> 00:24:25.670 also terrified a lot of traditional real estate 00:24:25.670 --> 00:24:28.029 brokers. It sent shockwaves through the industry 00:24:28.029 --> 00:24:30.589 because it effectively turns real estate agents 00:24:30.589 --> 00:24:34.130 into on -demand gig economy workers for the Realtor 00:24:34.130 --> 00:24:37.049 .com platform. So Op City was about capturing 00:24:37.049 --> 00:24:39.660 the buyer's side of the deal. But then they kept 00:24:39.660 --> 00:24:41.279 buying companies. It looks like they're trying 00:24:41.279 --> 00:24:43.359 to capture the entire life cycle of a property. 00:24:43.579 --> 00:24:46.420 That's the ecosystem play. In 2020, they bought 00:24:46.420 --> 00:24:48.759 a company called Avail. And what does Avail do? 00:24:49.099 --> 00:24:52.339 Avail makes software for landlords, specifically 00:24:52.339 --> 00:24:55.500 for smaller independent landlords. It's a platform 00:24:55.500 --> 00:24:58.099 for listing rentals, screening tenants, collecting 00:24:58.099 --> 00:25:01.000 rent online, managing maintenance requests. Why 00:25:01.000 --> 00:25:03.420 would a company focused on home sales buy a tool 00:25:03.420 --> 00:25:06.200 for renters and landlords? Because today's renter 00:25:06.200 --> 00:25:09.430 is tomorrow's first -time homebuyer. If you own 00:25:09.430 --> 00:25:10.910 the platform where they pay their rent every 00:25:10.910 --> 00:25:13.410 month, you have a relationship with them. You 00:25:13.410 --> 00:25:15.450 know when their lease is up. You can target them 00:25:15.450 --> 00:25:17.650 with marketing that says, hey, your lease is 00:25:17.650 --> 00:25:20.130 ending in six months. Did you know rents in your 00:25:20.130 --> 00:25:22.250 area are up 10 percent? Maybe it's time to think 00:25:22.250 --> 00:25:24.930 about buying. It's about building a future pipeline 00:25:24.930 --> 00:25:28.470 of customers. Smart. And then in 2022, another 00:25:28.470 --> 00:25:31.710 acquisition, Upnest. Upnest attacks the other 00:25:31.710 --> 00:25:34.440 side of the transaction. The seller. Most real 00:25:34.440 --> 00:25:37.259 estate portals are very buyer focused. Upnest 00:25:37.259 --> 00:25:39.240 is a marketplace where home sellers can have 00:25:39.240 --> 00:25:41.319 agents compete for their business. How does that 00:25:41.319 --> 00:25:43.680 work? A seller goes on Upnest, describes their 00:25:43.680 --> 00:25:46.920 property, and then multiple vetted agents submit 00:25:46.920 --> 00:25:49.640 proposals to that seller, often competing on 00:25:49.640 --> 00:25:51.279 their commission rates and their marketing plans. 00:25:51.559 --> 00:25:54.380 It brings transparency to the process of choosing 00:25:54.380 --> 00:25:57.769 a listing agent. So now, with these acquisitions, 00:25:57.849 --> 00:26:00.349 Realtor .com is monetizing the buyer through 00:26:00.349 --> 00:26:02.869 OpCity, the renter and landlord through Avail, 00:26:02.910 --> 00:26:05.569 and the seller through UpNest. They're trying 00:26:05.569 --> 00:26:07.869 to be the operating system for all of it. That's 00:26:07.869 --> 00:26:10.410 the goal. But there was one acquisition that 00:26:10.410 --> 00:26:13.170 didn't fit this pattern. One that they actually 00:26:13.170 --> 00:26:16.940 got rid of. Remodelista. and gardenista ah the 00:26:16.940 --> 00:26:20.400 lifestyle content experiment yes in 2016 in the 00:26:20.400 --> 00:26:23.180 early news core days they bought these two very 00:26:23.180 --> 00:26:26.259 popular very high -end design and lifestyle blogs 00:26:26.259 --> 00:26:31.150 and the thinking was What? We need to be more 00:26:31.150 --> 00:26:33.410 like a magazine. The thinking was, we need to 00:26:33.410 --> 00:26:35.670 capture people earlier in the funnel. We need 00:26:35.670 --> 00:26:37.789 to be the place they go for inspiration, for 00:26:37.789 --> 00:26:40.450 dreaming about their perfect kitchen. They wanted 00:26:40.450 --> 00:26:42.829 that lifestyle brand cachet. But it didn't work 00:26:42.829 --> 00:26:45.549 out? It didn't. By 2019, they sold the blogs 00:26:45.549 --> 00:26:47.750 back to their original founders. What does that 00:26:47.750 --> 00:26:50.279 strategic U -turn tell us? It tells us they had 00:26:50.279 --> 00:26:53.079 a moment of clarity. They realized they are not 00:26:53.079 --> 00:26:55.819 a media lifestyle brand like Architectural Digest. 00:26:55.940 --> 00:26:59.140 They are a heart -nosed, data -driven, transactional 00:26:59.140 --> 00:27:01.740 technology company. They don't want people casually 00:27:01.740 --> 00:27:03.940 browsing pretty pictures of throw pillows. They 00:27:03.940 --> 00:27:05.599 want people who are ready to sign a contract. 00:27:05.799 --> 00:27:08.400 They divested the fluff to double down on the 00:27:08.400 --> 00:27:10.740 core mechanics of the deal. Okay, so let's talk 00:27:10.740 --> 00:27:12.680 about how they communicate all of this to us, 00:27:12.799 --> 00:27:16.039 the public, the marketing. Because for a company 00:27:16.039 --> 00:27:19.579 that is, at its core, a giant database, they 00:27:19.579 --> 00:27:23.960 have spent an absolute fortune on big -name celebrity 00:27:23.960 --> 00:27:26.319 endorsements. They had to. They were in a street 00:27:26.319 --> 00:27:29.099 fight with Zillow for Mindshare. Zillow had become 00:27:29.099 --> 00:27:31.519 a verb. People would say, I'm Zillowing houses. 00:27:31.799 --> 00:27:34.640 Nobody has ever said, I'm realtor .coming. They 00:27:34.640 --> 00:27:36.779 had to find a way to break through the cultural 00:27:36.779 --> 00:27:39.619 noise. And their strategy for that began in 2015 00:27:39.619 --> 00:27:42.420 with Elizabeth Banks. And those ads, which were 00:27:42.420 --> 00:27:44.839 surprisingly directed by Fred. Savage from The 00:27:44.839 --> 00:27:47.180 Wonder Years were really clever. They were. They 00:27:47.180 --> 00:27:48.640 didn't just have her talking about listings. 00:27:48.819 --> 00:27:50.660 She was playing a character. She's playing the 00:27:50.660 --> 00:27:53.279 voice inside your head, the anxious, competitive 00:27:53.279 --> 00:27:55.579 voice you have when you're house hunting. She 00:27:55.579 --> 00:27:58.019 would joke about the not -yous, the other buyers 00:27:58.019 --> 00:28:00.259 who are out there being faster and smarter than 00:28:00.259 --> 00:28:03.380 you. The message was almost gamified. This is 00:28:03.380 --> 00:28:06.259 a competition, and Realtor .com is the tool you 00:28:06.259 --> 00:28:08.859 need to win. Don't let the other guy get your 00:28:08.859 --> 00:28:11.940 dream house. It was perfectly tuned for the hyper 00:28:11.940 --> 00:28:14.660 -competitive seller's market of 2015 and 2016. 00:28:15.220 --> 00:28:17.880 It tapped into that very real buyer anxiety. 00:28:18.240 --> 00:28:21.319 But as the market and the culture shifted, so 00:28:21.319 --> 00:28:24.240 did their marketing tone. Massively. Fast forward 00:28:24.240 --> 00:28:27.559 to 2021 and their big campaign features. Big 00:28:27.559 --> 00:28:30.960 boy from OutKast. Ah, a huge pivot. The campaign 00:28:30.960 --> 00:28:33.720 was called To Each Their Home, and the most memorable 00:28:33.720 --> 00:28:37.380 ad was our first big boy house. And the tone 00:28:37.380 --> 00:28:39.420 there wasn't about competition at all. Not at 00:28:39.420 --> 00:28:41.740 all. It was about inclusion. It was a joyful 00:28:41.740 --> 00:28:44.279 celebration of a young black couple buying their 00:28:44.279 --> 00:28:46.619 first home. It was about showing a huge diversity 00:28:46.619 --> 00:28:48.799 of housing types, family structures and buyers. 00:28:49.200 --> 00:28:51.859 It was Realtor .com planting a flag and saying, 00:28:51.920 --> 00:28:54.339 we are the democratic platform. Home ownership 00:28:54.339 --> 00:28:56.619 is for everyone and we serve everyone. And then 00:28:56.619 --> 00:28:58.500 just when you think you have their strategy figured 00:28:58.500 --> 00:29:00.319 out, they pivot again. The campaign reported 00:29:00.319 --> 00:29:03.859 for 2025 features Reba McEntire. The Nearly Home 00:29:03.859 --> 00:29:06.299 campaign, Reba is just fascinating casting. It's 00:29:06.299 --> 00:29:08.400 a completely different demographic target. Right. 00:29:08.480 --> 00:29:11.220 If Big Boy appeals to a younger, more urban, 00:29:11.299 --> 00:29:14.259 Gen X and millennial audience, Reba appeals to 00:29:14.259 --> 00:29:16.839 boomers, to the American heartland. It feels 00:29:16.839 --> 00:29:18.940 like they are deliberately trying to cover every 00:29:18.940 --> 00:29:22.519 single base. They had... Elizabeth Banks for 00:29:22.519 --> 00:29:25.140 the anxious millennial first -time buyer. They 00:29:25.140 --> 00:29:27.900 had Big Boy for the diverse modern homebuyer. 00:29:28.019 --> 00:29:30.680 Now they have Reba for the boomer who might be 00:29:30.680 --> 00:29:33.500 downsizing or for buyers in more rural or suburban 00:29:33.500 --> 00:29:35.980 markets. Yeah, they are trying to slice up the 00:29:35.980 --> 00:29:38.359 total addressable market and have a specific 00:29:38.359 --> 00:29:41.160 message for each piece of it. It's incredibly 00:29:41.160 --> 00:29:43.670 sophisticated. They know that home buying isn't 00:29:43.670 --> 00:29:46.250 just a 30 somethings game anymore. It's retirees, 00:29:46.250 --> 00:29:48.950 it's investors, it's multigenerational families. 00:29:49.369 --> 00:29:52.630 Reba signals trust, stability and comfort in 00:29:52.630 --> 00:29:55.029 what has become a very chaotic and stressful 00:29:55.029 --> 00:29:57.480 market. And it works. I mean, these aren't just 00:29:57.480 --> 00:30:00.160 cheesy local ads. They win Webby's. They win 00:30:00.160 --> 00:30:03.240 Adweek and OMA awards for their marketing. They're 00:30:03.240 --> 00:30:05.839 producing high quality entertainment. They realize 00:30:05.839 --> 00:30:08.039 that because the average person only buys a home 00:30:08.039 --> 00:30:10.119 once every seven or eight years, they need to 00:30:10.119 --> 00:30:12.619 find a way to stay relevant and top of mind during 00:30:12.619 --> 00:30:14.480 all the years you aren't in the market. And a 00:30:14.480 --> 00:30:16.799 memorable ad campaign is how you do that. So 00:30:16.799 --> 00:30:18.599 let's try to put all these pieces back together. 00:30:18.759 --> 00:30:21.480 We've pulled apart the 30 year history, the tech 00:30:21.480 --> 00:30:24.720 stack, the business model, the marketing. When 00:30:24.720 --> 00:30:27.710 we reassemble it. What is the big picture of 00:30:27.710 --> 00:30:30.970 Realtor .com today? I think the big picture is 00:30:30.970 --> 00:30:34.309 we are looking at a survivor. This is a company 00:30:34.309 --> 00:30:37.009 that was born in the dial -up era, that survived 00:30:37.009 --> 00:30:39.130 the dot -com implosion, that made it through 00:30:39.130 --> 00:30:42.210 the 2008 financial crisis, navigated this huge 00:30:42.210 --> 00:30:44.789 corporate marriage with News Corp, and is now 00:30:44.789 --> 00:30:47.309 trying to pivot its entire business model toward 00:30:47.309 --> 00:30:50.109 AI and referral fees. It's constantly had to 00:30:50.109 --> 00:30:52.250 reinvent itself. But there is this lingering 00:30:52.250 --> 00:30:54.349 question that's been in the back of my mind through 00:30:54.349 --> 00:30:56.609 this whole deep dive. We have all this incredible 00:30:56.609 --> 00:30:59.089 technology now. We have the obsidy algorithm 00:30:59.089 --> 00:31:01.309 matching us to the perfect agent. We have the 00:31:01.309 --> 00:31:03.490 flood data scaring us away from bad decisions. 00:31:03.650 --> 00:31:06.450 We have Reba McEntire's ads comforting us. But 00:31:06.450 --> 00:31:09.470 has all of this actually made the process of 00:31:09.470 --> 00:31:12.359 buying a house? any easier or better for us. 00:31:12.420 --> 00:31:14.559 That is the great paradox of the modern real 00:31:14.559 --> 00:31:16.519 estate market, isn't it? We have successfully 00:31:16.519 --> 00:31:19.400 moved from an era of information scarcity where 00:31:19.400 --> 00:31:21.440 you couldn't get the data to an era of information 00:31:21.440 --> 00:31:24.450 abundance. Maybe even information overload. I 00:31:24.450 --> 00:31:27.750 think so. You can now know too much. You know 00:31:27.750 --> 00:31:29.890 the noise level. You know the projected flood 00:31:29.890 --> 00:31:33.150 risk in 2050. You know the detailed sales history 00:31:33.150 --> 00:31:35.009 for the last 40 years. You know what all the 00:31:35.009 --> 00:31:37.450 neighbors' houses are estimated at. It sounds 00:31:37.450 --> 00:31:40.009 like a recipe for analysis paralysis. That's 00:31:40.009 --> 00:31:42.150 exactly what it is. The fundamental friction 00:31:42.150 --> 00:31:45.200 in the process has moved. The friction used to 00:31:45.200 --> 00:31:48.220 be finding the right house. Now the friction 00:31:48.220 --> 00:31:51.099 is committing to a decision when you are armed 00:31:51.099 --> 00:31:53.680 with an overwhelming amount of data, much of 00:31:53.680 --> 00:31:56.039 it negative. So here's the final thought then. 00:31:56.140 --> 00:31:58.539 When you're using the app and you see that perfect 00:31:58.539 --> 00:32:00.380 house, the one with the dream kitchen and the 00:32:00.380 --> 00:32:02.579 big backyard, but right next to the beautiful 00:32:02.579 --> 00:32:05.359 photos, there's a bright red badge that says 00:32:05.359 --> 00:32:09.720 wildfire risk. Nine out of ten. Does that abundance 00:32:09.720 --> 00:32:12.279 of data make you a more confident, empowered 00:32:12.279 --> 00:32:15.480 buyer? Or does it paralyze you and maybe stop 00:32:15.480 --> 00:32:17.299 you from buying a home you would have been perfectly 00:32:17.299 --> 00:32:19.440 happy in? It definitely changes the emotional 00:32:19.440 --> 00:32:21.880 calculus of the decision. The mystery, maybe 00:32:21.880 --> 00:32:24.140 some of the romance of finding a home, is gone. 00:32:24.380 --> 00:32:26.140 It's been replaced by an actuarial table. It 00:32:26.140 --> 00:32:28.660 has. It's a transaction now, backed by data and 00:32:28.660 --> 00:32:30.819 risk modeling. Which is probably safer in the 00:32:30.819 --> 00:32:33.579 long run. Probably. But you're right, it's a 00:32:33.579 --> 00:32:35.420 lot less fun than just falling in love with a 00:32:35.420 --> 00:32:38.670 house. Still, I think I'd rather know about the 00:32:38.670 --> 00:32:41.289 wildfire risk before I sign on the darted line. 00:32:41.430 --> 00:32:43.690 Fair point. So next time you find yourself scrolling 00:32:43.690 --> 00:32:47.369 at 11 p .m., just remember, you're not just looking 00:32:47.369 --> 00:32:50.529 at pictures of houses. You are interacting with 00:32:50.529 --> 00:32:54.029 a very complex, very expensive 30 -year -old 00:32:54.029 --> 00:32:56.849 machine that is trying to predict your next move. 00:32:58.069 --> 00:33:00.029 Thanks for listening to The Deep Dive. Thanks 00:33:00.029 --> 00:33:00.589 for having me.