Zillow's new ad network desperate ploy to make sales numbers?
Ad networks are to Web 2.0 business strategy what the portal was to the dot-bomb — a desperate attempt to turn the eyeballs that were used to calculate valuations for venture capital and acquisition purposes into actual revenue by aggregating advertising inventory. And they work about as well as you'd expect, which is not very. So I was more than a little bemused to see real estate listing Web site Zillow touting a new ad network along with a consortium of struggling newspaper publishers. Because from what I've heard about the startup, it hasn't been able to make revenue numbers promised to investors by founder and CEO Rich Barton, while it burns through cash on — wait for it — real estate.Barton, who famously founded travel Web site Expedia as a Microsoft property before it split off and sold to IAC, has apparently been telling investors that the company will make $40 million in revenue by the end of the year — even though the best estimates within the company peg the amount at more like $8 million, according to a source. Meanwhile, the company maintains a lavishly appointed office on the 46th floor of the Wells Fargo Center in Seattle's central business district, and has raised a total of around $87 million in three rounds of venture capital funding.
Trulia, which offers similar price estimates for properties, is neck-and-neck with Zillow in terms of visitors according to Compete. However, Trulia has only raised $33 million and is headquartered in a relatively humble office building at the foot of San Francisco's Portrero Hill. Granted, savvy visitors probably check both sites because the numbers provided can often be wildly inaccurate. Sort of like Barton's revenue estimates.