Brier Dudley's Blog
Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
February 5, 2013 3:00 PM
Posted by Brier Dudley
Zillow today is launching the fourth major business on its real estate platform.
Called Zillow Digs, it's a service that lets people planning to remodel their homes peruse and collect images from the huge collection of photos that have been uploaded to Zillow over the years.
The feature lets people compile and share online inspiration boards and scrapbooks, similar the online photo sharing site Pinterest. It's available today as an iPad app and on Zillow's site at zillow.com/digs.
The site's sizzle is a unique tool that estimates the cost to replicate some of the rooms pictured on the site. With a click it provides detailed estimates of materials, appliances, cabinets, labor and other expenses to create, with estimates adjusted based on local costs.
It's free for consumers to use Digs to search and collect images and generate estimates. Zillow plans to make money on services offered to architects, builders, suppliers and others that use Digs to connect with homeowners.
Zillow is inviting building professionals to market their services by creating free profiles on Digs, posting images of their work and interacting with homeowners. Zillow plans to eventually upsell them to additional marketing tools.
In an interview, Chief Executive Spencer Rascoff explained that Digs is following the same model as the company's real estate, mortgage and rental businesses.
It starts with an online service bringing transparency and utility to consumers. The first was the Zestimate home-value estimator. These services are built on top of Zillow's map and database, which now has location-specific information on tens of millions of homes.
The services are designed to attract a big online audience, which is monetized by selling ads and services to businesses. Then Zillow builds up the professional offering, by providing software tools that can help its business users run their companies.
Zillow has just started exploring what it can do in the $300 billion remodeling category but Rascoff sees a big opportunity in its webification. He cited an Ipsos study that found more than 75 percent of home buyers end up remodeling their new digs shortly after the purchase, yet online tools to help them remain limited.
"Home improvement's one of the last opaque industries, in terms of transparency," he said.
That's partly because it's hard to use templates when every home and homeowner is different, and there's a lot of variation in the prices of goods and services.
Zillow was unable to build a fully automatic estimate calculator, for instance, and still develops them with human input and advice from contractors. That's also why the estimates work only on a selection of rooms on Digs and not all of the more than 100 million home images that Zillow has compiled.
There are other companies going after the same space.
Palo Alto, Calif.-based Houzz began offering a visual, online site connecting homeowners and building professionals three years ago and raised $35 million in its third round of venture funding last week.
A Houzz spokeswoman said it now has more than 12 million monthly visitors and 160,000 "active home professionals" on its platform.
"New copycats will come and go," Gabriella Hebert said via email. "We've been aware of Zillow's efforts for some time and are flattered by their entrance, which further validates the market opportunity we identified early on."
Last month Zillow drew 45.9 million unique visitors, up 45 percent from January 2012. The traffic was boosted in part by acquisitions, including rental sites RentJuice and HotPads.
A few more images of the Digs iPad app:
Here's Zillow's demo video:
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