Zillow's Key to Success

Zillow's returning CEO Rich Barton co-founded the platform in 2005, and is key to the company's new home-flipping program, according to RBC Capital Markets' internet analyst Mark Mahaney.

Marketplace co-founder Spencer Rascoff recently stepped down as CEO, but is still on the board. Mahaney told CNBC that Barton's return brings with it "a huge track record, and when the news came out that he was coming back to be the CEO that's what really took the stock up," adding, "If anybody can make this gamble work, it's Rich Barton." Zillow shares dropped 9 percent after the initial announcement of the home-flipping program, then down 16 percent in August 2018, and decreased another 8 percent last week, though the stock recovered roughly seven percent the next day.

Barton, a serial entrepreneur, started Expedia under Microsoft in 1994, spun it into its own public company in 1999 and led it until 2003. He was also behind the launch of employment website Glassdoor.

Investors may be wary of the buying and selling model because it can take months to close on a deal, resulting in delayed revenue. Zillow hopes its process will provide a service to house sellers and cut down the time and difficulty of selling their home.

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