Zillow's Bundled Ad Offerings Helped Lift Revenue 74% in 2010

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The real estate downturn apparently has not hurt Zillow's revenue – or outlook.

The real estate services company’s revenue totaled $30.5 million in 2010, an increase of $13 million or 74 percent compared to the prior year, according to a report filed Monday with the Securities and Exchange Commission for an initial public offering.

Peter Conti, executive vice president at consultancy Borrell Associates, said an increase in Zillow's website traffic is promising. Zillow said it had 19.4 million unique visitors in March 2011, a 90 percent increase compared to a year ago. "It may mean there's strength in the market again," Conti said.

The document, called an S-1, offers a first-time glimpse into the Seattle-based company's financial records and strategy.

Zillow also reported:

* $13.2 million of its 2010 annual revenue came from two offerings: its premier agent offering that allows real estate agents to obtain featured listings and other ad placements, along with a lead generation service for mortgage lenders. Revenue from these two programs more than tripled compared to 2009, representing much faster growth than its display ad business.

*$17.2 million of its 2010 annual revenue came from display advertising, an increase of 27 percent from the prior year.

*Net annual losses of $6.8 million in 2010 and $13 million in 2009.

Zillow's fast-growing premier services points to increased demand for specialized advertising packages instead of run-of-site display advertising. "The agents/brokers finally realize they expect and can get more targeted advertising…they are moving away from more of a shotgun approach," Conti said.

Like any other company's IPO filing, Zillow identified pending lawsuits. Smarter Agent, a provider of mobile real estate applications; First American CoreLogic, a provider of real estate information and analytic services; and LendingTree, an online loan business, have filed lawsuits against Zillow and other companies for patent infringement. Zillow said it is fighting these claims.

Zillow reported that it's looking to raise $51.7 million from the initial public offering. It employed 252 full-time workers as of March 31.

The Zillow-Yahoo real estate network had 21.7 million unique visitors in March 2011, making it the largest real estate website based on audience, according to comScore. The next largest was Move real estate sites with 14.5 million unique visitors, followed by Trulia with 8.8 million.