In what can only be categorized as a shocking development, Zillow Group announced Thursday that Spencer Rascoff is stepping down as the company’s CEO, a position he’s held since 2010.
Rascoff, who helped found Zillow, took over as CEO in 2010 for Rich Barton, who served as the company’s first CEO and is also a co-founder.
And Zillow isn’t looking too far to find Rascoff’s replacement, as the online real estate giant announced that Barton is returning to serve as CEO again.
Barton never actually left the company, of course, serving as executive chairman since stepping down as CEO.
But now, he’s taking over as CEO again, with Rascoff moving solely into a spot on the company’s board of directors.
The move comes as a surprise considering how much Zillow has expanded over the last several years. The company officially entered the mortgage business when it bought Mortgage Lenders of America last year.
Rascoff led the company through those expansions, and more, including the big one: buying its main competitor, Trulia, in 2015.
According to Zillow, Rascoff oversaw a total of 15 acquisitions during his time as CEO. In that time, the company also grew its annual revenue from $30 million to $1.3 billion and expanded its workforce from 200 employees to more than 4,000.
But now, Rascoff is stepping down, although he says he’ll still be involved in the company.
“Leading Zillow Group through its tremendous growth has been one of the most rewarding experiences of my life,” Rascoff said in a release.
“I couldn’t be prouder of the team and what we have accomplished together, and I will continue my deep involvement with Zillow Group as a board director and major shareholder,” Rascoff continued. “The company is well-positioned for Rich to now take the wheel as CEO through its next phase of growth.”
The company did not provide any specific details as to the reasons why Rascoff is stepping down, but the company’s financials almost certainly had to play a role.
According to Zillow fourth-quarter and full-year earnings, which were also released on Thursday, Zillow’s revenue rose 24% in 2018 over the previous year, climbing to $1.3 billion, but the company still lost money.
In fact, Zillow lost more money than it did in 2017.
According to Zillow’s earnings statement, the company posted a net loss of $119.9 million in 2018, compared to a net loss of $94.4 million in 2017.
Now, Barton is re-assuming the role of CEO, and Barton said that he is pleased with the direction of the company. Barton, who also founded Expedia in 1994 and co-founded Glassdoor in 2007, has maintained an active role with Zillow since stepping down as CEO.
“In the past year, Zillow Group has become a very different company. We’re making strategic investments to broaden the Zillow Group portfolio to move further down the home-shopping funnel, giving today’s ‘uberized,’ on-demand consumers a full spectrum of options to buy, sell, borrow and rent on their terms,” Barton said.
“The launch of Zillow Offers and the acquisition of Mortgage Lenders of America in 2018 opened our doors to home buying and selling and home loan originations,” Barton continued. “Adding real estate transactions and eventually seamless mortgages to the Zillow Group portfolio positions us well for the next generation of online real estate and dramatically increases our addressable market.”
And lest anyone think that this move is a precursor to Zillow turning its back on its recent expansions into mortgages and homebuying, Barton said the company has ambitious targets for both.
According to Zillow, in three to five years, the company expects to be buying 5,000 homes a month and pulling in $20 billion in revenue from those home transactions.
Beyond that, the company believes it can originate more than 3,000 mortgages per month.
“We created Zillow Group in 2005 to make the real estate shopping and purchase process easier,” Barton said. “Much of our original dream is just now becoming possible. We are at an inflection point in this quest, and the time is right to shuffle leadership seats. I am excited to be back as CEO. I am incredibly grateful to Spencer for the indefatigable leadership that got us to this point, and I am happy we will benefit from his continued support and counsel as a board director.”
With Barton taking over as CEO, fellow Zillow co-founder Lloyd Frink will become the company’s executive chairman.