Is Zillow's New Focus Putting Its Biggest Business at Risk?
Housing has been incredibly strong in 2020, an abnormality during an economic downturn. That's been great for Zillow Group (NASDAQ: Z)(NASDAQ: ZG), one of the most popular online platforms for buyers, sellers, and renters. Zillow has seen steadily strong interest and high traffic across its websites, making it increasingly appealing to real estate professionals who count on Zillow to find clients.
But Zillow has steadily put more and more emphasis on so-called iBuying, where it will buy the property directly from the owner, and then attempt to sell it for a profit. As this business grows larger, Zillow is at risk of marginalizing the real estate professionals who are getting cut out of the action, and who still drive the vast majority of the company's cash flows. The biggest risk is that iBuying isn't a big market opportunity, or very profitable at scale, and Zillow ends up burning bridges pursuing a business model that doesn't pan out.
On the Nov. 6 edition of "The Wrap" on Motley Fool Live, host Jason Hall, Motley Fool and Millionacres contributor Tyler Crowe, and Millionacres editor Deidre Woollard discuss Zillow's pivot, the implications for its business, and the potential risks that could hurt its prospects and in return, investors.
Source Fool.com
