Google Is Testing New Home Listing Features in Search. Why That Could Be Bad News for Zillow

"Shares of Zillow Group ( Z), which claims to be the most visited real estate website in the U.S., tumbled over 10% Monday after Alphabet's ( GOOGL) Google began testing full home ads in its search results, including links to request tours and agent contacts. Other companies with home listing sites such as CoStar ( CSGP) and Rocket Companies ( RKT) also saw their stocks lose ground."

"Why This News Is Significant Goldman Sachs analysts told clients Monday that while they "don't expect a direct near-term impact on Zillow's business, given that most of Zillow's traffic is direct (e.g., Zillow.com, StreetEasy.com, mobile apps) and Google's new product is currently limited to select markets and mobile browsers, we view this development as a long-term risk for real estate portals like Zillow.""

Google is expanding into home listings by testing full home ads in search results that include links to request tours and contact agents. Zillow Group shares tumbled over 10% after the Google test, and other listing companies such as CoStar and Rocket Companies also saw stock declines. Goldman Sachs analysts expect no direct near-term impact on Zillow because much of Zillow's traffic is direct and Google's product is limited to select markets and mobile browsers. Goldman Sachs views the development as a long-term risk for real-estate portals. Year-to-date, Zillow shares are down about 8%, CoStar about 12%, and Rocket Companies over 60% in 2025.

Read at Investopedia