Zillow Group Inc (ZG) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Zillow Q3 2011 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Kevin McCarty, Zillow's Investor Relations Officer.

Good afternoon, everyone, and thank you for joining us as we discuss Zillow's third quarter 2011 financial results for the quarter ended September 30. Today's discussions will include predictions, estimates, or other information that need to be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995.

These statements may include, but are not limited to, Zillow's expected financial performance, as well as Zillow's strategic and operational plans, anticipated future products and services, and estimated market demand along with additional examples that were contained in today's earnings release. These statements are subject to risks and uncertainties, and actual results could differ materially. For a listing of these risk factors, please refer to our final prospectus filed with the SEC, as well as other factors set forth in today's earnings release.

Non-GAAP financial measures such as adjusted EBITDA will be referred to simply as EBITDA, which exclude share-based compensation and the facilities exit charge recorded during the third quarter. We have provided GAAP to non-GAAP reconciliations within today's earnings release, including EBITDA to net income, the most directly comparable GAAP financial measure.

And now, I'd like to turn the call over to Spencer Rascoff, Zillow's Chief Executive Officer.

Thank you, Kevin. Let me start by welcoming Kevin McCarty to Zillow. Kevin joined us last month as our Investor Relations Officer and we're very pleased to have him on board. Kevin brings nearly 15 years of IR experience at technology companies, including Intermec, Oracle, Liberate Technologies, and Hyperion Software. I know that Kevin is looking forward to meeting you at upcoming investor conferences and on your visits to Zillow headquarters in Seattle.

Welcome everyone to Zillow's third quarter earnings call. I'll start by reviewing key operating metrics and financial highlights from our third quarter. I will then provide an update on a few strategic business initiatives we accomplished during the quarter. Following my remarks, I'll turn the call over to our CFO, Chad Cohen, who will discuss our financial results and business metrics in more detail, along with our upward revised outlook for the remainder of 2011. We'll then take your questions.

The third quarter was an outstanding one for Zillow. We had record performance across our key operating and financial metrics, exceeding our outlook for the quarter. We delivered record revenues of $19.1 million, representing a 132% increase year-over-year. As a reminder, we break out our revenues into two categories, Marketplace and Display.

Marketplace revenues, driven by our subscription-based Premier Agent advertising program, continued to be our fastest-growing revenue category, increasing to $11.9 million from $3.6 million a year ago. This represents growth of 226% year-over-year. While $11.9 million in quarterly Marketplace revenues is outstanding growth, we have still only scratched the surface of the agent advertising opportunity as real estate agents spend approximately $6 billion annually marketing themselves and their listings.

Meanwhile, Display revenues, which consist of large national and regional brand advertisers, showed a terrific performance, growing 57% year-over-year to $7.2 million. This is an acceleration from the 30% year-over-year growth we experienced in the second quarter for this business.

At Zillow, creating an exceptional consumer experience is the foundation of what we do. The ultimate drivers of our business are the innovative products we build for consumers, built upon our living database of more than 100 million homes. Our website and mobile apps attract tens of millions of consumers every month who connect with real estate professionals in our marketplace, benefiting both consumers and professionals.

Now, I'm going to drill deeper into our Marketplace revenues in the quarter. Marketplace revenues and specifically the Premier Agent program continued to ramp significantly during the quarter. The program's rapid growth can be attributed primarily to two main factors.

First, new Premier Agents entering the program; and second, existing Premier Agents growing their presence and spending more advertising dollars across our platform. These expanded advertising commitments demonstrate that our product offerings are not only being well received, but are helping drive value and increased income for our Premier Agents.

During the quarter, the number of Premier Agents in the program grew 131% year-over-year to 14,876 Premier Agents. This metric, while important, only tells part of the story because when existing agents purchase more inventory, our Marketplace revenues increase, but our number of Premier Agents does not. Therefore, when we manage the business internally and assess the health of our agent business, we focus primarily on Marketplace revenues and then consider the number of Premier Agents.

Last month, we expanded the Premier Agent program from its existing one-category structure. There are now three tiers of participation, designed to appeal to a much broader range of agents and their varied online marketing needs and budgets.

Our traditional Premier Agent program, our local ZIP code-based subscription package for real estate agents, is now called Platinum Premier Agent. And it retains the same benefits as before, including featured listings, home buyer contacts, a graphical ad unit, and more.

In addition, we added two new features for Platinum Premier Agents to help them market themselves and their listings. Personal photos or logos now appear on their listings within our ListView display and agents can feature certain listings by marketing them as Zillow's special offers, listings in which they promote a seller concession of cashback at closing.

Our two new tiers of the Premier Agent program are, Silver Premier and Basic Premier. Silver costs agents a flat $79 per month and Basic is $39 per month, with different benefits for each level.

Both Silver and Basic are sold on a month-to-month basis through our inside sales team, as well as via self-service on our website, and include a subset of Platinum benefits. Importantly, these new advertising tiers are sold on a flat fee basis, not share of voice. So there is no limitation on the potential number of subscribing agents in a local area.

By expanding our Premier Agent program to three tiers of participation, we believe we have broadened our ability to capture a larger share of the estimated $6 billion that agents spend annually on advertising. Adding Silver and Basic tiers to our Premier Agent program allows us to generate additional revenue in ZIP codes where Platinum Premier Agents has [weightless]. The total number of agents in all three Premier Agent tiers will be included in our Premier Agent metrics beginning in the fourth quarter.

While we are excited to add these new options for agents, we still believe that the core of our Premier Agent business is the six-month contracted Platinum Premier program. As we analyze this business and the composition of our subscribers, we know that considerable headroom in pricing exists, as a significant percentage of Platinum Premier Agents are still under older pricing agreements. Based upon traffic levels, [they] were only a fraction of our [cost].

During the quarter, in select situations where the spread between legacy pricing and what we believe to be market pricing is particularly large, we began an initiative to increase price on current advertisers. New contracts reflect rates that more closely resemble fair market values, as determined primarily by increased traffic levels within given ZIP codes. The ability to gain revenue upside in our Platinum Premier Agent pricing by selling new inventory at fair market value along with selling additional inventory provides a solid foundation for revenue expansion.

It's also important to be expanding the suite of benefits we offer to agents, making the program more attractive to its members and [feature] Premier Agents. To that end, today, we are announcing the acquisition of Diverse Solutions, an Irvine, California-based company, which helps real estate agents market their business and improve their personal websites, by providing listings content and property search functionality. This acquisition expands Zillow's total addressable market by adding more critical marketing services for agents into our offerings. The consideration for the acquisition is approximately $7.7 million, including $5.5 million in cash and 75,000 restricted shares.

There are two sides to our Marketplace and now having walked you through our value proposition and enhancements on the professional side, I will turn to the consumer side of the Marketplace. Technology is our foundation. And the rich and relevant information it provides is ultimately what attracts consumers to Zillow's website and mobile applications.

Zillow's distinctive and expanding content starts with our living database of nearly all homes in the United States. We refer to the database as living because the information is continually updated by the combination of our proprietary algorithms, synthesis of third-party data from hundreds of sources, and through improvements by us and importantly by our community of millions of users. User-generated content from owners, agents, and others enriches our database with photos and additional property attributes.

To date, individuals and businesses that use Zillow have updated information on more than 25 million homes in our database and added approximately 65 million home photos, creating exclusive home profiles available nowhere else. This unique content is incredibly important for home shoppers, allowing them to view and analyze the entire market from one dynamic source. With this distinctive content coupled with other recent improvements, we now offer home shoppers broader access to all types of real estate listings from traditional for sale by agent to for sale by owner to foreclosures, new construction, land, rentals, and Make Me Move listings.

In addition to updated property information from individuals and businesses, at the end of the third quarter, we had published nearly 80,000 consumer-submitted reviews of local real estate agents. This is in addition to nearly 9,000 consumer-submitted reviews of mortgage professionals. We also support a vibrant and popular question-and-answer discussion form, Zillow Advice.

Another key example of our innovation is our leadership in mobile. The ability to access vital real estate information is incredibly important for shoppers while curbside looking at homes. Zillow operates the most popular platform of mobile real estate applications across iPhone, iPad, Android, and BlackBerry. During the quarter, we launched a real estate app on our fifth platform, Windows Phone 7.

Our mobile apps continued to receive awards and accolades during the quarter, securing four Number One rankings in Inman News' special report on the most popular and highest-rated real estate apps. Our innovation in mobile also improved the quality of context for professionals, delivering more focused home shoppers and more contacts, as consumers accessed Zillow via their mobile device while shopping.

In September, Zillow was used on a mobile device more than 11 million times, with roughly 2.4 million homes viewed on mobile devices every day or 28 homes per second. During the quarter, we continued to expand our business partnerships and product opportunities. We announced that Zillow now powers real estate search for Curbed, a national real estate blog network, giving local buyers easy access to millions of for-sale and rental listings.

This week, we also announced our partnership with AOL to integrate and extend the reach of Zillow Mortgage Marketplace's network into AOL's Real Estate and DailyFinance sites, providing home shoppers with tools to research, shop for, and compare mortgages. AOL users will have easy access to important financial information such as mortgage calculators, real-time mortgage rates, and Zillow's innovative mortgage shopping experience, allowing users to compare personalized loan quotes and lender reviews and connect with lenders.

On Zillow Mortgage Marketplace, through the first nine months of 2011, consumers submitted nearly 4 million loan requests and received on average 18 customized loan quotes per request. Although Zillow Mortgage Marketplace benefited from low mortgage rates in the quarter, because it is attached to our core real estate shopping platform, the business is not dependent on a low interest rate environment to drive traffic and usage.

Three key differentiators of Zillow Mortgage Marketplace are the anonymous shopping experience, the thousands of user-generated ratings and reviews of mortgage professionals, and our strong mobile presence. Since launching the Zillow Mortgage Marketplace iPhone app in June, people have used the app's mobile mortgage calculator 0.5 million times. In addition, in Q3, we integrated Zillow Mortgage Marketplace into our core real estate home shopping app on iPhone, the most popular real estate app on iOS. Zillow's platform, which covers data on more than 100 million homes, grants us the unique position to be able to analyze and predict real estate trends with increasing certainty.

Our housing data continues to be among the most widely cited authorities on the market. As an example of our thought leadership in this area, during the quarter, our Chief Economist, Dr. Stan Humphries, testified before a Senate Banking Subcommittee on ways to address the foreclosure crisis. He also pens regular housing columns for Forbes, Time, and other media outlets.

We continually produce cutting-edge real estate research and analytical products, including forecasting other housing indices, such as the Case-Shiller Home Price Index. All of this data and market analyses can be found in the Research section of our website. This level of insight is driven by our data-intensive platform, which forms the foundation for everything we do at Zillow.

We've made clear progress again this quarter towards our mission of being the most trusted and vibrant home-related marketplace. Having now posted two outstanding quarters following our successful public offering, we are even more encouraged by the market opportunity that lies ahead of us. We are keenly focused on our velocity and execution throughout all aspects of our business.

In closing, I'd like to thank our employees, users, and professional partners for their active role in helping Zillow not only achieve but eclipse our early milestones.

Now, I'll turn the call over to Chad to discuss our financials in more detail.

Thanks, Spencer. We had an outstanding third quarter, posting record total revenues of $19.1 million, representing an increase of 132% year-over-year. Marketplace revenues of $11.8 million increased 226% year-over-year, while representing 62% of total revenues. This growth was driven by our Platinum Premier Agent program and expanded advertising commitments from those agents. In the third quarter, our average monthly unique users also hit record levels, reaching over 24 million, up 101% year-over-year.

Our Display revenues were $7.2 million, increasing 57% year-over-year, while representing 38% of total revenues. This growth is attributed to significantly greater levels of investment in our advertising platform by larger businesses and industry-endemic advertisers, such as real estate brokers, builders, and lending institutions wanting to get in front of our consumers.

As mentioned earlier, non-GAAP financial measures, such as adjusted EBITDA will be referred to simply as EBITDA, which excludes share-based compensation and the facilities exit charge recorded during the third quarter.

EBITDA for the quarter was $3.7 million, representing 19% of revenues. Our net loss of $570,000 was impacted by facilities exit charge of $1.7 million recorded during the third quarter for the costs that will continue to be incurred under the operating lease for the remaining term. This relates to our facilities move in August to accommodate for the substantial growth in our business. Excluding this charge, our non-GAAP net income was $1.2 million. EPS was negative $0.02 per share on a GAAP basis; and on a non-GAAP basis, backing out the charge, was $0.05 per share.

Total operating expenses, excluding the facilities charge for the quarter, were $18 million as compared to $9.8 million in the same quarter last year. As a percentage of revenues, virtually all of our operating expenses decreased, with the exception of our cost of revenues which remained relatively flat when compared to last year's third quarter. This quarter, our cost of revenues were $3.1 million or 16% of revenues compared to $1.3 million or 15% of revenues in the third quarter of 2010. Last year, this expense category did not include revenue-sharing costs associated with our strategic relationship with Yahoo! Real Estate, which launched earlier this year.

Sales and marketing expenses were $7 million or 37% of revenues as compared to 49% of revenues or $4.1 million in the third quarter of 2010. As noted in last quarter's call, we are starting to ramp investment in our sales platform and continue to gain valuable insight from our advertising tests, which will guide our marketing plans for 2012. Technology and development costs were $3.8 million or 20% of revenues as compared to 31% of revenues or $2.5 million in the third quarter of 2010.

We accelerated investment across our platform to further augment our core engineering assets. And in addition, we continue to further develop and diversify our Marketplace product offerings, as demonstrated by our two new Premier Agent tiers, which were recently released.

G&A costs, net of our facilities charge, were $4 million or 21% of revenues as compared to the prior year at 23% of revenues or $1.9 million. The increase in absolute dollars is attributed to general public company-related costs and overall growth in the business such as increased third-party fees related to audit and tax, higher rents from our larger facilities, as well as incremental headcount and system investments to support a growing infrastructure. These costs are fairly fixed in nature and though higher to the levels we saw as a private Company, we see considerable leverage in this line item as our revenues grow. We continue to reap the benefits of our previous investments across these operating categories and are seeing compelling leverage in our model.

Quickly turning to our balance sheet, we ended the quarter with approximately $96 million in cash and cash equivalents, and no debt.

On our second quarter call, we gave an outlook of $59 million to $61 million for the full-year 2011 revenues, and $8 million to $10 million for full-year EBITDA. On the call today, we are revising that outlook upward.

With respect to revenues, we are now expecting fourth quarter revenues to be in the range of $17 million to $18 million, up from our previous outlook of $16 million to $17 million. And due to the outstanding quarter we just closed, we are raising our full-year outlook to $63 million to $64 million, which represents a 108% year-over-year growth at the midpoint of our range.

In addition to raising our fourth quarter and full-year outlook on revenues, we are also raising our full-year outlook on EBITDA, which will now be in the range of $9 million to $10 million. At the midpoint of our range, this represents a 15% EBITDA margin for the year, which is significantly up from our break-even business in 2010 and on our way to achieving our target margins of 30% to 35% a few years out.

We are assuming a diluted weighted average share count of approximately 32 million shares for the fourth quarter and 23 million shares for the full year.

In summary, we are very pleased with our third quarter results, which give us confidence in raising our full-year outlook. As we look across our business, we're extremely encouraged by our momentum in all areas, from product development to traffic growth to our mobile leadership, all of which increase our Marketplace and Display revenues and associated profit leverage.

Operator, we would now like to open up the call for questions.

Thank you. (Operator Instructions) Justin Patterson, Morgan Keegan.

Great, thanks for taking my question and congratulations on the quarter. When I look at guidance, it appears that you essentially just raised for the upside seen in this quarter and yet, you've had a pretty substantial acceleration in Display revenue and quite a lot of growth in Marketplace, just trying to understand what's the cost of the implied deceleration in Q4?

Thanks, Justin. This is Chad speaking. So yes, we had a fantastic, outstanding Display quarter, up 57% year-over-year, largely due to a couple of things. One, seasonality as well as attaining market leadership has helped amplify those results in the quarter. And what we think will happen in the fourth quarter is that Display revenues will return to still outstanding, but more normalized levels that we saw in the first and second quarter of the year.

So when we look at the outlook and what that translates to into our outlook for the fourth quarter and full year is that, yes, we are raising the bottom end of that range from $8 million to $10 million, up to $9 million to $10 million. But we're seeing some timing issues with our levels of investment and shifting some of those investments from the engineering side, sales and marketing, as well as from an infrastructure perspective into the fourth quarter, as well as expanding some of those levels of investments across those line items.

So that's contributing to some of that squeeze, but overall, we are really happy to be in a position that we are, putting out $9 million to $10 million in our EBITDA outlook for the year, it's a 15% margin, up from our break-even business last year and as we mentioned on the call, well on our way to our 30% to 35% margins a few years out.

Got it. And then, with respect to the pricing environment, it sounded like you have quite a lot of room to improve pricing on the agent business. Can you talk about how quickly we should see some of those effects? And I guess what the initial reception to some of the new agent programs in the marketplace would be?

Thanks, Justin, this is Spencer. So most of our Premier Agents currently are on contracts from prices that we determined to be fair at significantly lower traffic levels of more than a year ago. So because our traffic is growing so quickly, that puts us in the fortunate position of being -- of having a lot of pricing headroom.

As I mentioned in the prepared remarks, we've just started to have those conversations with a small number of agents. And so, we're in the very early stages of that transition to more market-based pricing. Going forward, we'll be focused more on this and I think that will drive revenue upside. But of course, from a team standpoint, from a time and bandwidth standpoint, the initiatives to bring existing advertisers up to fair market pricing does come at the cost of having time available to sign up as many new subscribers or grow the total number of subscriber count. And so, I think that tradeoff is something that we'll be watching in the coming quarters.

Great. Thanks, Spencer. Thanks, Chad.

Thank you.

Thanks.

Mark Mahaney, Citi.

Thanks. Two questions, please. First, just in terms of the Premier Agent count in the December quarter, did that -- would that have had all of the agents coming in under all three plans or would that have just had the top-tier Premier Agents? And then, the second thing is, as you think about how people will come into the program in the future, do you -- would you expect people to come in under the Basic plan and then over time, as they realize value from that, to migrate upwards, or how would you expect that to roll out in the marketplace? How would you expect new subscribers to come in across those three plans?

So, the Silver and Basic plans were rolled out after the end of the quarter. So the Premier Agent number of over 14,000 at the end of the third quarter is just what is now considered the Platinum program. In terms of how Premier Agents might enter the program, it's early to say. It's only been a couple of weeks of Silver and Basic. The focus from a manpower standpoint is clearly [is on] Platinum because it's a significantly higher price point and has more value to the agent accordingly. So it's really hard to know.

I think, certainly, some number of the Silver and Basic Premier Agents will be agents who were on a wait list for a Platinum spot, but are now becoming Silver or Basic because that opportunity is open to them. And then, there will be some for whom the price point is more affordable and they are prepared to spend less than $100 a month, but not prepared to spend more than $200 a month that the average Platinum contract would cost. So it's really too early to say. I think probably next quarter, we'll be able to give a little bit more color on the different price tiers, although we are just going to report the total number of Premiers across all three tiers.

And then, two follow-ups, please. Zillow Mortgage Marketplace, any comment on the materiality of that segment to the overall revenue?

Zillow Mortgage Marketplace is still not material to total revenue. The revenue there is within the Marketplace segment and the bulk of the Marketplace revenue is from Premier Agents. As I may have said on the last call, I think over time, we may consider breaking out Zillow Mortgage Marketplace into its own category. But for now, it's within Marketplace and not material.

And then, last question, in terms of the Display advertising, I think in the past, you've thought about it as something of a tradeoff. You've got that inventory that in the past -- in, I mean, years past, you would have used just for Display advertising and now recently, you've got more effective ways to monetize that through the Premier Agent program. Any basic changes in your thinking about how you weigh the use of that inventory? Is there something that makes you think, given how strong the Display ad results were, that maybe you would want to shift some of that inventory back to Display advertising? Thanks.

I think, Mark, the way you characterize the way we think about the tradeoff on just a site usage or a mobile app usage standpoint is correct. We really do think about the pixels on the page and we could have a Display ad here or we could have an ad for our local real estate agent. We are biased, we have been biased; we do skew in favor of local, targeted advertising, which is of more value to the user.

And so that guides our focus, that makes these decisions more heavily weighted towards the local Marketplace revenue, both Premier Agent and Zillow Mortgage Marketplace at the expense of Display. That philosophy did not change in the quarter. So it's not like the outstanding Display revenue was the result of any change in the amount of ad inventory we made available to Display. And even despite the terrific Display quarter, that philosophy won't change.

We build our ad products to satisfy and delight our users, and we think that the local ad product of Primer Agent and local lenders for Zillow Mortgage Marketplace isn't even better experienced for our users than seeing a Display ad, no matter how targeted that Display ad could be and we do work hard with our advertisers to have terrific targeting on Display, but we still are biased in favor of the Marketplace side of the business.

Thank you, Spencer.

(Operator Instructions). Robert Coolbrith, ThinkEquity.

Hi, good afternoon, and congratulations on the strong quarter. Just wanted to ask another follow-up on Display. Does the seasonality of that business typically play out in terms of variation in fill rate, in pricing, or inventory availability across the year? And in the seasonally weaker periods, do you think the -- do you see more of an opportunity to increase fill rates by flooding in some non-endemic advertisers? Is there an opportunity to penetrate maybe some adjacent categories? Just -- and one follow-up also on Diverse Solutions. Thank you.

Great. Hi, Robert, this is Chad. I'll talk quickly about the Display business and hand it over to Spencer for your second question. So in terms of Display business, our sell-through rates definitely pick up seasonally during the home-buying season. And as a result of the higher sell-through rates by the field sales team that sells our Display revenues, we see higher CPMs in those months. So pricing increases; as a result, we have less dependence on some of the ad networks that we use to backfill inventory. And as a result, we do get pricing leverage there.

Most of our advertisers in the Display category are those that are in our vertical and endemic to the real estate business. Those are our real estate brokers, our homebuilders, and new construction companies, as well as lending institutions and other financial institutions. Those three categories make up 60% to 70% of our revenues during those peak quarters. But also a --

(inaudible).

To the Display revenues in those peak quarters. But also a substantial component of those Display revenues outside. And we do see on occasion non-endemic players also making significant ad buys. But 60% to 70%, as I mentioned, are those endemic players within the vertical.

Great. And on Diverse Solutions, just briefly, I had a chance to check it out, some of the search and listings functionality seems pretty interesting. But there also seems to be some functionality around CRM, contact management, event marketing, that kind of thing in their product suite. Can you maybe give any thoughts on what you might view as a CRM opportunity for Zillow and do you have any broader ambitions of sort of becoming sort of the marketing centerpiece for your agent customers? Thank you.

Thank you. So in a very short period of time, just a couple of years, Zillow has became a critical online marketing partner for nearly 15,000 agents. We provide contacts -- customer contacts from people shopping on Zillow.com, customer contacts from Zillow Mobile, customer contacts from Yahoo! Real Estate, which we power.

We also give these agents a lightweight contact management system so they can keep track of their communications with those customers. We give them a listings distribution service through the company that we acquired about six or nine months ago called Postlets, which helps them send listings around the web onto other websites. We offer Advice, an advice section of our website where they can talk with potential clients and demonstrate their local expertise.

So there are a lot of different online marketing things that we offer to agents, but we were missing a pretty critical piece of the picture, which is for most real estate agents, when they think Internet marketing, they first and foremost think of their own websites. And although we did have and do have many dozens of what we call widgets, which are little snippets of Zillow functionality that one can embed onto their own website.

We were missing the silver bullet of website functionality for an individual real estate agent, which is the ability to add MLS-sourced listings onto their website. And so after a very thorough review of the landscape, we've settled on and zeroed in on Diverse Solutions as the technology leader of MLS-sourced listings functionality onto agent websites.

Now, you're right that the thousands of agents who use Diverse Solutions' product to power the listings on their websites, they are also provided with the CRM functionality. So if you're using agents' website and you contact the agent, that agent will have their own login where they can keep track of their conversations with that customer and that's an important part of the Diverse Solutions' functionality that they make available to real estate agents.

In terms of the Zillow.com experience, right now, we offer a limited subset of that functionality where agents can see how many contacts they've gotten and how long their phones call were with those contacts, they can see who they've e-mailed, et cetera. And I've talked on the prior call and on the IPO road show about our interest in trying to improve that functionality for real estate agents, so they can do a better job of converting these contacts into commission checks. Anything that we can do that helps these agents follow up more rapidly with these customers and stay on top of these clients makes them more successful as real estate agents and makes them more likely to buy more advertising from us.

So, yes, improving that type of functionality is something that we're working on. And we were interested in Diverse Solutions because of the ability to power agent websites with listings, but they do also have part of this functionality baked into their product offering on those agent websites as well.

Great. Thank you.

At this time, I'd like to turn it over to our speakers for any closing remarks.

Thank you. I just want to thank everyone for joining our third quarter earnings call today. We appreciate your interest in Zillow and look forward to speaking with you again soon. Thanks, everyone.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, you may all disconnect. Everyone, have a great evening.