Redfin Gains Instant National Footprint With Acquisition of Walk Score

Full disclosure: The Tim is currently a Redfin shareholder.

Well this is interesting.

Redfin was one of the last real estate search sites to integrate Walk Score into their listing pages. Today Redfin announced that they have acquired Walk Score.

From Redfin’s blog post:

Redfin + WalkScoreThe acquisition is Redfin’s first and the reason for it is simple: We want to give folks a complete portrait of what it would be like to live somewhere new, within the house and in the surrounding neighborhood.

Since developing its original idea, Walk Score has become an online authority on neighborhoods, adding cycling and transit metrics to the mix, and delivering 20 million scores per day through 30,000 partner sites. Even better, Walk Score has rental homes. This is all stuff that Redfin needs on its own site.

Redfin, meanwhile, with its membership in the Multiple Listing Services used by agents to list properties, is the authority on homes for sale; as a broker, we can also convert traffic into lasting, profitable customer relationships. We have a full suite of mobile applications.

The two businesses together nicely address one another’s needs: for Redfin, richer content about neighborhoods; for Walk Score, homes for sale to engage its online visitors, and a way to convert those visitors into happy, paying customers.

I’m honestly quite surprised that Zillow did not acquire Walk Score first, with as many companies as they have been swallowing up lately (StreetEasy, HotPads, Trulia, etc.).

The really interesting thing about this move is that it instantly gives Redfin a national footprint without compromising the superior quality of their real estate listing data. I’m very intrigued to see what they do in the coming years with their combined resources.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

11 comments:

  1. 1
    drshort says:

    I guess I’m dense. How does this acquisition further Redfin’s corporate strategy? One more piece of flair on the website. They could have used WalkScore’s score on their site for a small fee or less. Even so, no one is going to Redfin listings or, better yet, using it’s service because of a WalkScore. Zillow M&A envy (and I think Redfin is 10x the company that Zillow is)? Hopefully they didn’t pay much.

    The profitable Redfin customers probably care much more about school ratings than walk scores.

  2. 2

    RE: drshort @ 1 – I suspect it was a bargain, and the seller was desperate.

  3. 3
    Erik says:

    RE: drshort @ 1
    Yeah, I don’t get it either. I could give 2 sh!ts about these stupid websites. And I really don’t care they added flair. If they provided a virtual tour through every house, offer ultra cheap financing, etc, now that would be noteworthy. What I don’t need is a quantitative score that tells me the house is close to a convenient store. Plus, everyone has different needs. Which store or restaurant is the house close to? I never look at the walk score since it adds no value. I think redfin got ripped off. They bought a lemon.

    Hopefully we get some data on inventory or housing prices today. Show a hard scrabble remodel like the one I sent you Tim. Show how we can use the website you work for to save money. I need help on my remodel from people that work nights and weekends. Do you have those people at the place you work for?

  4. 4
    Erik says:

    I just checked out porch. Looks great tim. I am gonna try them out.

  5. 5
    wreckingbull says:

    RE: Kary L. Krismer @ 2 – I am guessing that Redfin is trying to offer a more customized search instead of just an MLS portal. It is reasonable to assume that this firm could contribute to that. Not saying this was a good purchase, but that would be my guess as to their intentions.

  6. 6
    Marc says:

    I think this is about enlarging their sales funnel by getting a lot more back links to their website. WalkScore’s little widgets are on 30,000 websites that’s a lot of ways for consumers searching the web on a variety or websites to somehow find their way to Redfin. That would explain why they’re making the service cheaper to website owners (100 free links is now 5,000).

    They’re going to be playing a bit of a shell game with the public markets when they IPO – the market clearly puts huge multiples on companies that can say our web traffic is going up massively year over year, every year. To do that, they’re going to need a big bag of new tricks. Adding rentals to their site also could be a play towards being a more comprehensive site and becoming as much like a portal as a brokerage company can be (i.e., Zillow/Trulia/Realtor.com).

    This line from Glenn’s post on the Redfin Blog also makes me think the price was right due to Walk Score not having great revenue: “Redfin, meanwhile, … can also convert traffic into lasting, profitable customer relationships.”

    That sounds to me like WalkScore may have had monetization problems.

  7. 7
    Macro Investor says:

    Hey Redfin, branch out into more counties. Get some more actual listings before you waste time on garbage like walk sore.

    This tells me Redfin isn’t really serious about their core business. It must be boring to them already, or not profitable. Probably means they’re already on the down slope to oblivion.

  8. 8
    The Tim says:

    By Macro Investor @ 7:

    Hey Redfin, branch out into more counties.

    They’ve expanded into four new markets (81 counties) just since September. Tucson (1 county), Wisconsin (72 counties), Fresno (3 counties), and Jacksonville (5 counties).

  9. 9
    drshort says:

    If I were Redfin, I would think more about vertical acquisitions and try to make an end to end service for the home buyer. Real estate + financing + escrow + title insurance. I’m sure regulations make this a little challenging, but having a seamless experience would be much simpler for the consumer.

  10. 10
    The Tim says:

    RE: drshort @ 9 – Awesome idea! Redfin agrees. They’ve been working on it for almost two years: GeekWire, February 2013 – Redfin sets up new title and escrow subsidiary, continuing quest to upend real estate

  11. 11

    By drshort @ 9:

    If I were Redfin, I would think more about vertical acquisitions and try to make an end to end service for the home buyer. Real estate + financing + escrow + title insurance. I’m sure regulations make this a little challenging, but having a seamless experience would be much simpler for the consumer.

    I missed this post. I would strongly disagree. Associated businesses tend to suck, so if the consumer wants to have a problematic transaction, they should go with affiliated companies. And for buyers, going with an affiliated lender can mean another offer gets accepted.

    This type of system benefits the firm, not the consumer.

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