Zillow had staked its future growth on its digital home-flipping business, but getting the algorithm right proved difficult. The WSJ digs in and explores what forced it to backpedal.
This month, Zillow conceded failure in what amounts to one of the sharpest recent American corporate retreats. It said it would close Zillow Offers, which was responsible for the majority of the company’s revenue but none of its profits; cut about 2,000 jobs, or a quarter of its staff; and write down losses of more than a half-billion dollars on the value of its remaining homes. The company’s market cap, which closed at a peak of $48.35 billion in February, is now around $16 billion.