Zillow revenue surges as users flock to property site
(Reuters) - Zillow Inc's (Z.O) quarterly revenue jumped 73 percent as the real estate website attracted more users, a trend set to continue into a first quarter the company says promises higher earnings than analysts had expected.
Shares of Zillow rose 12 percent in after-market trading after the company forecast revenue in the current quarter within a range of $36 million to $37 million.
Analysts on average had been expecting first-quarter revenue of $34 million, according to Thomson Reuters I/B/E/S.
Seattle-based Zillow, which provides online housing value appraisals known as "Zestimates", favors the popular "freemium" model for its products, in which the basic version is free but additional features require payment.
With 45.9 million unique users, January 2013 was a record month for traffic, the company said. More than half of all users accessed the site using mobile devices.
"Mobile traffic in January was larger than all of our traffic for Zillow just three years ago, in January 2010," Chief Executive Spencer Rascoff said in a call with analysts.
This rapid growth in new visitors has enabled the company to raise the prices it charges real estate agents for access to its premium services.
Zillow said it added 2,770 new agents to its Premier Agent program in the fourth quarter, growing its base of paying customers to more than 29,000 as of December 31.
The company competes with Move Inc MOVE.O, owner of sites like Realtor.com, and Trulia Inc (TRLA.N).
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Zillow said in a statement its fourth-quarter revenue rose to $34.3 million from $19.9 million a year earlier.
Average monthly unique users grew 47 percent year-on-year to 34.5 million in the quarter.
Net income, however, fell to $500,000, or 2 cents per share, from $900,000, or 3 cents per share, a year earlier.
Analysts had expected the company to break even on revenue of $31.5 million in the fourth quarter, according to Thomson Reuters I/B/E/S.
After losing one of its larger advertisers, Foreclosure.com, in November, Zillow would be expanding its sales and marketing budget by about 70 percent year-on-year in 2013, Rascoff said.
"We are also in the midst of substantially improving our map-based home and neighborhood search experience and redesigning major portions of our site to better serve the needs of buyers," he said.
Shares of Zillow, which have gained 47 percent over the last three months, traded as high as $43.60 in extended trading on Wednesday after closing on the Nasdaq at $38.97.
(Editing by Robin Paxton)