AOL to Add Zillow Mortgage Marketplace to Websites

Two AOL online destinations will incorporate the Zillow Mortgage Marketplace into their websites beginning in 2012.

Zillow's online mortgage rate search, mortgage calculators and lender review features will be accessible from the AOL Real Estate and DailyFinance websites.

Mortgage lenders pay Zillow to advertise their rates on the Mortgage Marketplace, which are funneled to the Web through integrations with product and pricing engines. In addition to the rate searches on the Zillow homepage, the Mortgage Marketplace is accessible from mobile devices on Zillow's real estate listing app, as well as a dedicated Mortgage Marketplace app.

Zillow got its start in 2006, offering a free automated valuation model for residential properties and selling property listing ads to real estate agents. It launched the mortgage rate ads in 2008 and began charging for them in 2010. Lenders pay a cost per click fee to publish rates and generate leads from Zillow's search service.

Incorporating Zillow's mortgage rate search features is an interesting move for AOL, which powers its real estate listing service with properties provided by Move Inc.—Zillow's fiercest competitor and the operator of Realtor.com.

Real estate listing websites are evolving to become full end-to-end home shopping portals; most notably with the addition of technology that lets consumers shop for mortgages and compare interest rates.

Despite generating record revenue in the third quarter of 2011, Zillow posted a $570,000 net loss, the company also announced this week. Zillow took a $1.7 million charge related to the expense of moving offices in August. Excluding the charge, Zillow posted net income of $1.1 million. Zillow posted its first-ever quarterly profit during the second quarter this year.

Average monthly unique users of its websites and mobile apps increased 101% year-over-year to 24.2 million during the third quarter.

Marketplace revenue—the rate advertising sold to mortgage lenders and property listings sold to real estate agents—was $11.8 million, up 226% from $3.6 million a year ago. Sales of traditional banner advertising—what Zillow calls display revenue—was $7.2 million, up 57% from $4.6 million in 3Q10.