CoStar Group CEO Andy Florance on Zillow, M&A, and Domain's Key Lime Pie Problem

Metadata

• Author: Online Marketplaces
• Full Title: CoStar Group CEO Andy Florance on Zillow, M&A, and Domain’s Key Lime Pie Problem
• URL: https://www.onlinemarketplaces.com/articles/costar-group-ceo-andy-florance-on-zillow-ma-and-domains-key-lime-pie-problem/

Highlights

• Take, for example, his response to a claim from Mike DelPrete’s keynote presentation the previous morning that number two portals can’t overtake leaders: “You can knock out a number one, especially if the number one treats their customers like garbage.” (View Highlight)
• I pushed him on his opinion on Zillow’s defence.

  “If the page says, ‘claim this property’, how could someone have uploaded it? It’s not feasible. It’s not possible. I think it says something about the operations. It’s just sloppy.”

  “I hate to say this, but being cynical, I could imagine a scenario where a competitor says, ‘Look, I can steal a lot of content. I may get sued and have to pay $1billiondollarjudgmentforviolatingcopyrightlaw,butIcanmake$2 billion by getting the Jumpstart’.” (View Highlight)

• We move on to Domain, a historic acquisition for CoStar Group, as it enters the Australian market to engage in a turf war with REA Group. First, some context. Domain, backed by the media company Nine, had fallen behind REA Group’s flagship portal realestate.com.au as financial backing dried up after a string of underwhelming, non-transformative acquisitions. Florance suggests that a bootstrapped Domain has spent too long splitting its focus on low-yield revenue levers that distract from the far more lucrative core portal offering. “My number one priority is building the best product possible, and that’s number one, day one,” says Florance. The good news, according to Florance, is that CoStar Group already has an excellent Product team that knows how to build residential applications. It’s just a matter of bringing what they do to consumers in Australia. (View Highlight)
• Which begs the question: why has Domain’s product been allowed to meander into relative non-competitiveness? Florance suggests that the problem lies in outdated business practices, revealing that obsolete directives have added unnecessary friction. (View Highlight)
• , CoStar Group’s founder has a story for everything. And secondly, some things need to change.

  “Having acquired 40 to 50 companies, I never cease to be amazed by how a culture and a company can continue to follow faithfully orders that came from a rational executive 10 years ago, but make no sense today. If you can find that stuff and remove it, you get a cleaner company.” (View Highlight)