Zillow Group announced less than two weeks ago the return of Rich Barton to replace Spencer Rascoff as CEO of the online real estate titan amid the company’s audacious pivot into mortgage lending and real estate flipping.
One day after the announcement, Zillow’s stock jumped 25% at market close, despite mixed financials in the fourth quarter that were made public same day.
Undoubtedly, making both announcements concurrently works in Zillow’s favor, as the stock market cheers Zillow’s management shuffle following months of plunging stock prices and rising concerns over the company’s risky and untested bet, dubbed as “moonshot effort” by Bloomberg News.
Investors know they can count on Barton in turmoil. Looking back, when the dream duo of the visionary Rich Barton and the techie Lloyd Frink founded Zillow in 2005 with Spencer Rascoff among the first to join the team, Barton became the company’s first CEO. Under Barton’s leadership in the earliest days when Zillow still lived on venture capital, the company survived the real estate crisis, which later turned into the global financial crisis of 2007–2008.
In 2010, Barton handed the reigns over to Rascoff and stepped back as executive chairman in a transition strategically planned and prepared for over years. But he remained the brains behind many of Zillow’s strategic moves.
In an interview with GeekWire in 2016, Barton described his own role at Zillow during Rascoff’s era: “I’m not running day-to-day, I’m more of a coach. My job is to support Spencer and make sure he can do his job really, really well. When he’s wrestling with big questions, I’m there to help him walk through it, but I’m not there to make decisions for him.”
In the same interview, then-CEO Rascoff further articulated: “Rich is involved in, really, every major decision that we make, so certainly acquisitions, things like business strategy…Nobody describes the company and articulates the vision and strategy better than Rich. It’s his company and always will be in that sense.”
Indeed, for those who have followed Zillow over the years, Barton represents a perfect fit to take the wheel as Zillow is being positioned to embark on the bold move to dramatically expand its scope of business.
And now with Barton out at front again, it only seems fit for investors and followers to express support – which has become amazingly scarce ever since the company announced its prospective business model shift mid-2018 – when support is most needed.
One thing could be said with confidence: The management shuffle most likely did not come as a surprise to people inside Zillow.
The time-tested partnership among Barton, Frink and Rascoff could be traced decades back to Expedia’s early days and has continued to become Zillow’s hallmark. These leaders made management transition so much of a natural progression when Rascoff took over the driving seat back in 2010, that investors could take confidence in the company’s stability this time as it prepares itself to embark on the next phase of growth.