10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934

For the quarterly period ended March 31, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-35237

ZILLOW, INC.

(Exact name of registrant as specified in its charter)

Washington	20-2000033
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1301 Second Avenue, Floor 31, Seattle, Washington	98101
(Address of principal executive offices)	(Zip Code)

(206) 470-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of April 30, 2013, 27,263,123 shares of Class A common stock and 7,268,626 shares of Class B common stock were outstanding.

ZILLOW, INC.

Quarterly Report on Form 10-Q

For the Three Months Ended March 31, 2013

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)		2
	Condensed Balance Sheets		2
	Condensed Statements of Operations		3
	Condensed Statements of Cash Flows		4
	Notes to Condensed Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.	Controls and Procedures		26
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		27
Item 1A.	Risk Factors		27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		28
Item 4.	Mine Safety Disclosures		28
Item 6.	Exhibits		29
	Signatures		30

i

As used in this Quarterly Report on Form 10-Q, the terms “Zillow,” “the Company,” “we,” “us” and “our” refer to Zillow, Inc., unless the context indicates otherwise.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including Part I, Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations), contains forward-looking statements based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include all statements that are not historical facts and generally may be identified by terms such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” or the negative or plural of these words or similar expressions.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including but not limited to, our ability to maintain and effectively manage an adequate rate of growth; the impact of the real estate industry on our business; our ability to innovate and provide products and services that are attractive to our users and advertisers; our ability to increase awareness of the Zillow brand in a cost-effective manner; our ability to maintain or establish relationships with listings and data providers; our ability to attract consumers to our mobile applications and websites; our ability to successfully integrate and realize the benefits of our past or future strategic acquisitions or investments; our ability to compete successfully against existing or future competitors; the reliable performance of our network infrastructure and content delivery process; and our ability to protect our intellectual property. Further discussion of factors that may affect our business and results of operations is included in Part 1, Item 1A (Risk Factors) in our Annual Report on Form 10-K for the year ended December 31, 2012. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements, and we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.

WHERE YOU CAN FIND MORE INFORMATION

Our filings with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available on our website at www.zillow.com, free of charge, as soon as reasonably practicable after the electronic filing of these reports with the Securities and Exchange Commission. The information contained on our website is not a part of this quarterly report on Form 10-Q.

Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We intend to also use the following social media channels as a means of disclosing information about the company, our services and other matters and for complying with our disclosure obligations under Regulation FD:

• Zillow Twitter Account (https://twitter.com/zillow)

• Zillow Facebook Page (https://www.facebook.com/Zillow)

• Zillow Company Blog (http://www.zillowblog.com/)

The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this quarterly report on Form 10-Q.

1

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ZILLOW, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share data, unaudited)

	March 31,			December 31,
	2013			2012
Assets
Current assets:
Cash and cash equivalents	$	131,948		$	150,040
Short-term investments		47,102			44,054
Accounts receivable, net of allowance for doubtful accounts of $1,236 and $965 at March 31, 2013 and December 31, 2012, respectively		9,499			8,655
Prepaid expenses and other current assets		4,445			2,652
Total current assets		192,994			205,401
Long-term investments		25,081			9,389
Property and equipment, net		16,773			13,634
Goodwill		54,284			54,284
Intangible assets, net		20,241			21,248
Other assets		254			279
Total assets	$	309,627		$	304,235
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	4,399		$	3,158
Accrued expenses and other current liabilities		3,884			6,318
Accrued compensation and benefits		3,238			2,514
Deferred revenue		7,779			8,349
Deferred rent, current portion		126			94
Total current liabilities		19,426			20,433
Deferred rent, net of current portion		3,651			3,485
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, $0.0001 par value; 30,000,000 shares authorized as of March 31, 2013 and December 31, 2012; no shares issued and outstanding as of March 31, 2013 and December 31, 2012		—			—
Class A common stock, $0.0001 par value; 600,000,000 shares authorized as of March 31, 2013 and December 31, 2012; 27,208,296 and 26,414,414 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively		3			3
Class B common stock, $0.0001 par value; 15,000,000 shares authorized as of March 31, 2013 and December 31, 2012; 7,268,626 and 7,462,526 shares issued and outstanding as of March 31, 2013 and December 31, 2012		1			1
Additional paid-in capital		361,961			351,981
Accumulated deficit		(75,415	)		(71,668	)
Total shareholders’ equity		286,550			280,317
Total liabilities and shareholders’ equity	$	309,627		$	304,235

See accompanying notes to condensed financial statements.

2

ZILLOW, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

	Three Months Ended
	March 31,
	2013			2012
Revenue	$	38,966		$	22,833
Costs and expenses:
Cost of revenue (exclusive of amortization) (1)		4,130			3,350
Sales and marketing		19,794			8,315
Technology and development		10,611			5,030
General and administrative		8,233			4,445
Total costs and expenses		42,768			21,140
Income (loss) from operations		(3,802	)		1,693
Other income		55			31
Net income (loss)	$	(3,747	)	$	1,724
Net income (loss) per share — basic and diluted	$	(0.11	)	$	0.06
Weighted-average shares outstanding — basic		33,770			28,348
Weighted-average shares outstanding — diluted		33,770			30,994
(1)    Amortization of website development costs and intangible assets included in technology and development	$	4,208		$	2,004

See accompanying notes to condensed financial statements.

3

ZILLOW, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Three Months Ended
	March 31,
	2013			2012
Operating activities
Net income (loss)	$	(3,747	)	$	1,724
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		4,779			2,336
Share-based compensation expense		4,146			1,418
Loss on disposal of property and equipment		495			63
Bad debt expense		414			99
Deferred rent		198			411
Amortization of bond premium		69			199
Changes in operating assets and liabilities:
Accounts receivable		(1,258	)		(601	)
Prepaid expenses and other assets		(1,768	)		1,085
Accounts payable		1,241			(413	)
Accrued expenses		(1,710	)		(587	)
Deferred revenue		(570	)		764
Net cash provided by operating activities		2,289			6,498
Investing activities
Proceeds from maturities of investments		5,000			—
Purchases of investments		(23,809	)		—
Purchases of property and equipment		(5,944	)		(2,525	)
Purchases of intangible assets		(685	)		(504	)
Net cash used in investing activities		(25,438	)		(3,029	)
Financing activities
Proceeds from exercise of Class A common stock options		5,057			2,905
Net cash provided by financing activities		5,057			2,905
Net increase (decrease) in cash and cash equivalents during period		(18,092	)		6,374
Cash and cash equivalents at beginning of period		150,040			47,926
Cash and cash equivalents at end of period	$	131,948		$	54,300
Supplemental disclosures of cash flow information
Noncash transactions:
Capitalized share-based compensation	$	777		$	383
Write-off of fully depreciated property and equipment	$	485		$	—

See accompanying notes to condensed financial statements.

4

ZILLOW, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 1. Organization and Description of Business

Zillow, Inc. was incorporated as a Washington corporation effective December 13, 2004, and we launched the initial version of our website, Zillow.com, in February 2006. Zillow operates the leading real estate and home-related information marketplaces on mobile and the Web, with a complementary portfolio of brands and products to help people find vital information about homes, and connect with local professionals. In addition to our websites, including Zillow.com, we also own and operate Zillow Mobile, our suite of home-related mobile applications, Zillow Mortgage Marketplace, where borrowers connect with lenders to find loans and get competitive mortgage rates, Zillow Digs, our home improvement marketplace where consumers can find visual inspiration and local cost estimates, Zillow Rentals, a marketplace and suite of tools for rental professionals, Postlets, Diverse Solutions, Buyfolio, Mortech and HotPads. Zillow provides products and services to help consumers through every stage of homeownership – buying, selling, renting, borrowing and remodeling.

Certain Significant Risks and Uncertainties

We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: rates of revenue growth; engagement and usage of our products; scaling and adaptation of existing technology and network infrastructure; competition in our market; management of our growth; acquisitions and investments; qualified employees and key personnel; protection of our brand and intellectual property; changes in government regulation affecting our business; intellectual property infringement and other claims; protection of customers’ information and privacy concerns; and security measures related to our mobile applications and websites, among other things.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed financial statements should be read in conjunction with the audited financial statements and accompanying notes as of and for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 22, 2013. The condensed balance sheet as of December 31, 2012, included herein, was derived from the audited financial statements as of that date.

The unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2013, our results of operations for the three month periods ended March 31, 2013 and 2012, and our cash flows for the three months ended March 31, 2013 and 2012. The results of the three month period ended March 31, 2013 is not necessarily indicative of the results to be expected for the year ended December 31, 2013 or for any interim period or for any other future year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates are used for revenue recognition, the allowance for doubtful accounts, website development costs, goodwill, recoverability of intangible assets with definite lives and other long-lived assets, and for share-based compensation. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected.

Recently Issued Accounting Standards

In February 2013, the Financial Accounting Standards Board (“FASB”) issued guidance on the reporting of amounts reclassified out of accumulated other comprehensive income. An entity must report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net

5

income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. This guidance is effective for interim and annual reporting periods beginning after December 15, 2012, with earlier adoption permitted, and must be applied prospectively. We adopted this guidance on January 1, 2013. The adoption of this guidance did not have any impact on our financial position, results of operations or cash flows as we do not have any items of other comprehensive income in any period presented.

Note 3. Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

We applied the following methods and assumptions in estimating our fair value measurements:

Cash equivalents — Cash equivalents are comprised of highly liquid money market funds with original maturities of less than three months. The fair value measurement of these assets is based on quoted market prices in active markets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy.

Short-term and long-term investments — Our investments consist of fixed income securities, which include U.S. government agency securities, commercial paper, and corporate notes and bonds. Investments with maturities greater than three months but less than one year are classified as short-term investments. Investments with maturities greater than one year are classified as long-term investments. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Our U.S. government agency securities are classified as Level 1 in the fair value hierarchy. Our commercial paper and corporate notes and bonds are classified as Level 2 in the fair value hierarchy. Our short-term and long-term investments are classified as held-to-maturity and are recorded at amortized cost, as we do not intend to sell the investments, and it is not more likely than not that we will be required to sell these investments prior to maturity. The amortized cost of our short-term and long-term investments approximates their fair value.

Of the short-term investments and long-term investments on hand as of March 31, 2013, 65.3% mature on or prior to March 31, 2014, and the remaining 34.7% mature on or prior to March 31, 2015.

The following tables present the balances of assets measured at fair value on a recurring basis as of the dates presented (in thousands):

	March 31, 2013
	Total		Level 1		Level 2
Cash equivalents:
Money market funds	$	125,478	$	125,478		—
Short-term investments:
U.S government agency securities		33,083		33,083		—
Commercial paper		6,998		—		6,998
Corporate notes and bonds		7,021		—		7,021
Long-term investments:
U.S government agency securities		23,803		23,803		—
Corporate notes and bonds		1,278		—		1,278
Total	$	197,661	$	182,364	$	15,297

6

	December 31, 2012
	Total		Level 1		Level 2
Cash equivalents:
Money market funds	$	143,246	$	143,246	$	—
Short-term investments:
U.S government agency securities		26,085		26,085		—
Commercial paper		16,965		—		16,965
Corporate notes and bonds		1,004		—		1,004
Long-term investments:
U.S government agency securities		7,079		7,079		—
Corporate notes and bonds		2,310		—		2,310
Total	$	196,689	$	176,410	$	20,279

We did not have any Level 3 assets or liabilities measured at fair value on a recurring basis as of March 31, 2013 or December 31, 2012.

Note 4. Property and Equipment, net

The following table presents the detail of property and equipment as of the dates presented (in thousands):

	March 31, 2013			December 31, 2012
Website development costs	$	36,836		$	33,448
Computer equipment		8,717			8,380
Leasehold improvements		1,659			831
Software		1,265			1,209
Construction-in-progress		3,603			3,093
Office equipment, furniture and fixtures		2,721			2,186
Property and equipment		54,801			49,147
Less: accumulated amortization and depreciation		(38,028	)		(35,513	)
Property and equipment, net	$	16,773		$	13,634

We recorded amortization and depreciation expense related to property and equipment (other than website development costs) of $0.6 million and $0.3 million, respectively, during the three months ended March 31, 2013 and 2012.

We capitalized $3.9 million and $2.3 million, respectively, in website development costs during the three months ended March 31, 2013 and 2012. Amortization expense for website development costs included in technology and development expenses was $2.5 million and $1.3 million, respectively, during the three months ended March 31, 2013 and 2012.

Construction-in-progress primarily consists of website development costs that are capitalizable, but for which the associated applications had not been placed in service.

Note 5. Intangible Assets

The following tables present the detail of intangible assets subject to amortization as of the dates presented (in thousands):

	March 31, 2013
	Cost		Accumulated Amortization			Net
Developed technology	$	14,335	$	(2,218	)	$	12,117
Purchased content		9,729		(6,663	)		3,066
Customer relationships		4,875		(657	)		4,218
Trademarks		1,061		(221	)		840
Total	$	30,000	$	(9,759	)	$	20,241

7

	December 31, 2012
	Cost		Accumulated Amortization			Net
Developed technology	$	14,335	$	(1,534	)	$	12,801
Purchased content		9,044		(6,015	)		3,029
Customer relationships		4,875		(387	)		4,488
Trademarks		1,061		(131	)		930
Total	$	29,315	$	(8,067	)	$	21,248

Amortization expense recorded for intangible assets for the three months ended March 31, 2013 and 2012 was $1.7 million and $0.7 million, respectively. These amounts are included in technology and development expenses.

Note 6. Income Taxes

We are subject to federal and state income taxes in the United States. During the three months ended March 31, 2013 and 2012, we did not have reportable taxable income, and we are not projecting reportable taxable income for the year ending December 31, 2013. We have provided a full valuation allowance against our net deferred tax assets as of March 31, 2013 and December 31, 2012 because, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some or all of the deferred tax assets will not be realized. Therefore, no tax liability or expense has been recorded in the financial statements. We have accumulated tax losses of approximately $115.7 million as of December 31, 2012, which are available to reduce future taxable income.

Note 7. Shareholders’ Equity

Our board of directors has the authority to fix and determine and to amend the number of shares of any series of preferred stock that is wholly unissued or to be established and to fix and determine and to amend the designation, preferences, voting powers and limitations, and the relative, participating, optional or other rights, of any series of shares of preferred stock that is wholly unissued or to be established, subject in each case to certain approval rights of holders of our outstanding Class B common stock. There was no preferred stock issued and outstanding as of March 31, 2013 or December 31, 2012.

Our Class A common stock has no preferences or privileges and is not redeemable. Holders of Class A common stock are entitled to one vote for each share.

Our Class B common stock has no preferences or privileges and is not redeemable. At any time after the date of issuance, each share of Class B common stock, at the option of the holder, may be converted into one share of Class A common stock, or automatically converted upon the affirmative vote by or written consent of holders of a majority of the shares of the Class B common stock. During the three months ended March 31, 2013, 193,900 shares of Class B common stock were converted into Class A common stock at the option of the holders. During the year ended December 31, 2012, 2,065,787 shares of Class B common stock were converted into Class A common stock at the option of the holders. Holders of Class B common stock are entitled to 10 votes for each share.

In September 2012, we sold 3,844,818 shares of our Class A common stock, including 419,818 shares of our Class A common stock pursuant to the underwriters’ option to purchase additional shares, and certain shareholders sold 575,000 shares of our Class A common stock, at a price of $43.00 per share. We received net proceeds of $156.7 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We received no proceeds from the sale of our Class A common stock by the selling shareholders.

Note 8. Share-Based Awards

On July 19, 2011, our 2011 Incentive Plan (the “2011 Plan”) became effective and was subsequently amended and restated effective as of June 1, 2012, to, among other things, increase the total number of authorized shares and include the material terms of performance goals for performance-based awards. The 2011 Plan is administered by the compensation committee of the board of directors. Under the terms of the 2011 Plan, the compensation committee of the board of directors may grant equity awards, including incentive stock options, nonqualified stock options, restricted stock or restricted stock units, to employees, officers, directors, consultants, agents, advisors and independent contractors. The compensation committee has also authorized certain senior executive officers to grant equity awards under the 2011 Plan, within limits prescribed by the compensation committee.

8

Stock Options

All stock options outstanding at March 31, 2013 are nonqualified stock options, with the exception of substituted incentive stock options for 15,143 shares of Zillow’s Class A common stock that were granted in connection with the December 14, 2012 acquisition of HotPads, Inc. Options under the 2011 Plan are granted with an exercise price per share not less than 100% of the fair market value of our Class A common stock on the date of grant, with the exception of substituted stock options granted in connection with acquisitions, and are exercisable at such times and under such conditions as determined by the compensation committee. Under the 2011 Plan, the maximum term of an option is ten years from the date of grant. Any portion of an option that is not vested and exercisable on the date of a participant’s termination of service expires on such date. Employees generally forfeit their rights to exercise vested options after 3 months following their termination of employment or 12 months in the event of termination by reason of death, disability or retirement. Options granted under the 2011 Plan are typically granted with seven-year terms and typically vest 25% after 12 months and ratably thereafter over the next 36 months, except for options granted under the Stock Option Grant Program for Nonemployee Directors (“Nonemployee Director Awards”), which are fully vested and exercisable on the date of grant, and except for certain options granted to the Company’s chief executive officer described below.

The following table summarizes stock option activity for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Options Available for Grant			Number of Shares Subject to Existing Options			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		979,024			5,361,256		$	6.23		4.51	$	89,749,207
Authorized increase in plan shares		1,068,374			—			—
Granted		(1,884,079	)		1,884,079			30.01
Exercised		—			(1,624,304	)		4.59
Forfeited or cancelled		158,359			(158,359	)		21.42
Outstanding at December 31, 2012		321,678			5,462,672			14.48		4.88		78,912,364
Authorized increase in plan shares		1,387,064			—			—
Granted		(1,585,758	)		1,585,758			36.97
Exercised		—			(601,252	)		8.41
Forfeited or cancelled		68,831			(68,831	)		25.92
Outstanding at March 31, 2013		191,815			6,378,347			20.52		5.54		217,875,348
Vested and exercisable at March 31, 2013					2,133,492			8.50		3.73		98,502,329

As of March 31, 2013, the numbers above do not include 144,270 shares of restricted stock and 289,469 restricted stock units granted pursuant to our 2011 Plan.

The fair value of options granted, excluding Nonemployee Director Awards and certain options granted to the Company’s chief executive officer described below, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends and with the following assumptions for the periods presented:

	Three Months Ended March 31,
	2013			2012
Expected volatility		51	%		51	%
Expected dividend yields		—			—
Risk-free interest rate		0.70	%		0.76	%
Weighted-average expected life		4.58 years			4.58 years
Weighted-average fair value of options granted	$	16.28		$	12.91

In the three months ended March 31, 2013, stock options for an aggregate of 30,690 shares of our Class A common stock were granted as Nonemployee Director Awards. The fair value of options granted for the Nonemployee Director Awards, $16.29 per share, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends, expected volatility of 51%, a risk-free interest rate of 0.36%, and a weighted-average expected life of 3.5 years. During the three months ended March 31, 2013, share-based compensation expense recognized in our statement of operations related to Nonemployee Director Awards was $0.5 million, and is included in general and administrative expenses.

In January 2013, an option for 500,000 shares of our Class A common stock was granted to the Company’s chief executive officer. One-eighth of the total number of shares subject to the option will vest and become exercisable on the three-year anniversary

9

of the date of grant. An additional 1/96^th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable six years from the date of grant. One-eighth of the total number of shares subject to the option will vest and become exercisable on the four-year anniversary of the date of grant. An additional 1/96th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable seven years from the date of grant. The contractual life of the award is 10 years. The fair value of the option, $19.00 per share, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends, expected volatility of 51%, a risk-free interest rate of 0.70%, and a weighted-average expected life of 7.3 years. The option is subject to shareholder approval of a share increase under the 2011 Plan, and no portion of the option is exercisable until such shareholder approval has been obtained. However, for accounting purposes for determining the date of grant, shareholder approval is deemed to be a formality or perfunctory because the award has been approved by Zillow’s co-founders, who control enough votes to ensure shareholder approval of the share increase under the 2011 Plan.

In December 2012, an option for 500,000 shares of our Class A common stock was granted to the Company’s chief executive officer. One-eighth of the total number of shares subject to the option will vest and become exercisable on the one-year anniversary of the date of grant. An additional 1/96^th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable four years from the date of grant. One-eighth of the total number of shares subject to the option will vest and become exercisable on the two-year anniversary of the date of grant. An additional 1/96^th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable five years from the date of grant. The contractual life of the award is 7 years. The fair value of the option, $13.28 per share, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends, expected volatility of 49%, a risk-free interest rate of 0.60%, and a weighted-average expected life of 6.0 years. A portion of the option is subject to shareholder approval of a share increase under the 2011 Plan, and no portion of the option is exercisable until such shareholder approval has been obtained. However, for accounting purposes for determining the date of grant, shareholder approval is deemed to be a formality or perfunctory because the award has been approved by Zillow’s co-founders, who control enough votes to ensure shareholder approval of the share increase under the 2011 Plan.

Restricted Stock Awards

The following table summarizes restricted stock award activity for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Shares of Restricted  Stock			Weighted- Average  Grant- Date Fair Value
Unvested outstanding at January 1, 2012		75,000		$	29.69
Granted		299,213			30.43
Vested		(34,110	)		29.41
Forfeited or cancelled		—			—
Unvested outstanding at December 31, 2012		340,103			30.34
Granted		3,673			44.66
Vested		(9,923	)		35.23
Forfeited or cancelled		(1,270	)		27.75
Unvested outstanding at March 31, 2013		332,583			30.39

The fair value of the outstanding shares of restricted stock awards will be recorded as share-based compensation expense over the vesting period. As of March 31, 2013, there was $9.5 million of total unrecognized compensation cost related to restricted stock awards.

10

Restricted Stock Units

The following table summarizes activity for restricted stock units for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Restricted  Stock Units			Weighted- Average  Grant- Date Fair Value
Unvested outstanding at January 1, 2012		—		$	—
Granted		300,961			38.77
Vested		—			—
Forfeited or cancelled		(4,957	)		39.69
Unvested outstanding at December 31, 2012		296,004			38.76
Granted		—			—
Vested		—			—
Forfeited or cancelled		(6,535	)		39.69
Unvested outstanding at March 31, 2013		289,469			38.74

The fair value of restricted stock units will be recorded as share-based compensation expense over the vesting period. As of March 31, 2013, there was $9.2 million of total unrecognized compensation cost related to restricted stock units.

Share-Based Compensation Expense

The following table presents the effects of share-based compensation in our statements of operations during the periods presented (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of revenue	$	163	$	85
Sales and marketing		1,227		190
Technology and development		1,034		310
General and administrative		1,722		833
Total	$	4,146	$	1,418

Note 9. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares (including Class A common stock and Class B common stock) outstanding during the period. In the calculation of basic net income (loss) per share, undistributed earnings are allocated assuming all earnings during the period were distributed.

Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares (including Class A common stock and Class B common stock) outstanding during the period and potentially dilutive Class A common stock equivalents, except in cases where the effect of the Class A common stock equivalent would be antidilutive. Potential Class A common stock equivalents consist of Class A common stock issuable upon exercise of stock options and Class A common stock underlying unvested restricted stock and unvested restricted stock units using the treasury stock method.

For the periods presented, the following Class A common stock equivalents were included in the computation of diluted net income (loss) per share because they had a dilutive impact (in thousands):

	Three Months Ended March 31,
	2013		2012
Class A common stock issuable upon the exercise of stock options		—		2,580
Class A common stock underlying unvested restricted stock		—		66
Class A common stock underlying unvested restricted stock units		—		—
Total Class A common stock equivalents		—		2,646

For the three months ended March 31, 2013, 2,856,087 shares underlying stock options, 66,455 shares of Class A common stock underlying unvested shares of restricted stock, and 63,065 shares of Class A common stock underlying unvested restricted stock units have been excluded from the calculations of diluted net loss per share because their effects would have been antidilutive.

11

In the event of liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of all classes of common stock have equal rights to receive all the assets of the Company after the rights of the holders of outstanding preferred stock have been satisfied. We have not presented net income (loss) per share under the two-class method for our Class A common stock and Class B common stock because it would be the same for each class due to equal dividend and liquidation rights for each class.

Note 10. Commitments and Contingencies

Lease Commitments

We have various operating leases for office space and equipment. In March 2011, we entered into a lease effective through November 2022 for approximately 66,000 square feet of office space that has housed our principal offices in Seattle, Washington, since August 2011. In June 2012, we entered into a lease amendment for our corporate headquarters in Seattle, Washington, which increases the rentable area of the premises by 21,575 square feet. In April 2012, we entered into an operating lease in Irvine, California for 20,025 square feet under which we are obligated to make escalating monthly lease payments which began in August 2012 and continue through July 2022. In November 2012, we entered into an operating lease in San Francisco, California for 18,353 square feet under which we are obligated to make escalating monthly lease payments which began in December 2012 and continue through November 2018. We lease additional office space in San Francisco, California, Chicago, Illinois, Lincoln, Nebraska, and New York, New York. The operating lease for our prior headquarters in Seattle, Washington, which we vacated in August 2011, expired in February 2013.

Future minimum payments for all operating leases as of March 31, 2013 are as follows (in thousands):

Remainder of 2013	$	2,959
2014		4,101
2015		4,347
2016		4,834
2017		4,985
All future years		19,335
Total future minimum lease payments	$	40,561

Rent expense for the three months ended March 31, 2013 and 2012 was $1.1 million and $0.5 million, respectively.

Purchase Commitments

As of March 31, 2013, we had non-cancelable purchase commitments for content related to our mobile applications and websites totaling $15.8 million. The amounts due for this content as of March 31, 2013 are as follows (in thousands):

Remainder of 2013	$	3,062
2014		4,157
2015		4,291
2016		3,435
2017		818
All future years		—
Total future purchase commitments	$	15,763

Line of Credit and Letters of Credit

During March 2011, we entered into a loan and security agreement with a financial institution to establish a line of credit of $4.0 million. In April 2012, we amended our loan and security agreement to increase our line of credit from $4.0 million to $25.0 million. The line of credit is secured by substantially all our assets, including our intellectual property, and provides us with flexibility for future potential financing needs. The revolving line of credit contains customary financial covenants, including the maintenance of a minimum adjusted quick ratio (calculated as (i) unrestricted cash plus net accounts receivable divided by (ii) current liabilities less the sum of deferred revenue and any indebtedness owing from borrower to bank), measured on a monthly basis, of 1.50 to 1.00, and minimum Adjusted EBITDA, measured on a quarterly basis, of greater than or equal to negative $5 million for each quarterly period through December 31, 2012 and greater than or equal to $0 for each quarterly period thereafter. In addition, the revolving line of credit contains customary restrictions on our ability to, among other things, engage in certain mergers and acquisition transactions and create liens on assets. The revolving line of credit contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of certain covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events and material judgments. The occurrence of an event of default will increase the applicable rate of interest by five percentage points and

12

could result in the acceleration of Zillow’s obligations under the revolving line of credit. As of March 31, 2013, we were in compliance with all covenants, and there were no amounts outstanding under the line of credit. The line of credit is available through April 2016.

In March 2011, we executed a standby letter of credit of $1.5 million in connection with the lease of our Seattle offices, and in July 2012, we amended the standby letter of credit to increase the amount to approximately $1.7 million. In November 2012, we executed a letter of credit of approximately $0.2 million in connection with the lease of our San Francisco office. The letters of credit are secured by our investments and are effective until 60 days after the expiration date of the lease.

Legal Proceedings

There have been no material developments in legal proceedings during the three months ended March 31, 2013. For a description of previously reported legal proceedings, refer to Part I, Item 3 (Legal Proceedings) of our Annual Report on Form 10-K for the year ended December 31, 2012.

From time to time, we are involved in litigation and claims that arise in the ordinary course of business. Although we cannot be certain of the outcome of any litigation and claims, nor the amount of damages and exposure that we could incur, we currently believe that the final disposition of such matters will not have a material effect on our financial position, results of operations or cash flow. This forward-looking statement is based on management’s current understanding of the relevant law and facts, and it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of arbitrators, judges and juries. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Note 11. Segment Information and Revenue

We have one reportable segment. Our reportable segment has been identified based on how our chief operating decision-maker manages our business, makes operating decisions and evaluates operating performance. The chief executive officer acts as the chief operating decision-maker and reviews financial and operational information on an entity-wide basis. We have one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components. Accordingly, we have determined that we have a single reporting segment and operating unit structure.

The chief executive officer reviews information about revenue categories, including marketplace revenue and display revenue. The following table presents our revenue categories during the periods presented (in thousands):

	Three Months Ended March 31,
	2013		2012
Marketplace revenue:
Real estate	$	26,109	$	14,185
Mortgages		4,909		2,408
Total Marketplace revenue		31,018		16,593
Display revenue		7,948		6,240
Total revenue	$	38,966	$	22,833

Note 12. Subsequent Events

In April 2013, pursuant to the terms of a Restricted Stock Unit Award Notice and Restricted Stock Agreement between Zillow and a former employee, 218,071 unvested restricted stock units held by such employee became vested, such that the former employee is entitled to receive one share of Zillow’s Class A common stock for each outstanding restricted stock unit. As a result of the accelerated vesting of the restricted stock units, we expect to record approximately $7.1 million of share-based compensation expense within sales and marketing expense during the three months ended June 30, 2013.

13

In April 2013, we amended our operating lease for our principal offices in Seattle, Washington, to increase the rentable area of the premises by 22,583 square feet as of October 1, 2013, and to increase the rentable area of the premises by an additional 22,583 square feet as of September 1, 2014, for which we are obligated to make escalating monthly lease payments beginning in January 2014 and terminating in November 2022. Future minimum payments for the additional space are as follows (in thousands):

Remainder of 2013	$	—
2014		909
2015		1,720
2016		1,765
2017		1,810
All future years		9,557
Total future minimum lease payments	$	15,761

In connection with the April 2013 amendment to our operating lease, we amended our standby letter of credit to increase the amount from approximately $1.7 million to approximately $2.0 million.

14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” “estimate,” or similar expressions constitute forward-looking statements. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, including in the section titled “Note Regarding Forward-Looking Statements,” and also those items listed in Part 1, Item 1A (Risk Factors) in our Annual Report on Form 10-K for the year ended December 31, 2012.

Overview

Zillow operates the leading real estate and home-related information marketplaces on mobile and the Web, with a complementary portfolio of brands and products to help people find vital information about homes, and connect with local professionals. In addition to our websites, including Zillow.com, we also own and operate Zillow Mobile, our suite of home-related mobile applications, Zillow Mortgage Marketplace, where borrowers connect with lenders to find loans and get competitive mortgage rates, Zillow Digs, our home improvement marketplace where consumers can find visual inspiration and local cost estimates, Zillow Rentals, a marketplace and suite of tools for rental professionals, Postlets, Diverse Solutions, Buyfolio, Mortech and HotPads.

Zillow provides products and services to help consumers through every stage of homeownership — buying, selling, renting, borrowing and remodeling. We are transforming the way people make home-related decisions, and enabling homeowners, buyers, sellers and renters to find and connect with local professionals best suited to meet their needs.

Our living database of more than 110 million U.S. homes — homes for sale, homes for rent and homes not currently on the market — attracts an active and vibrant community of users. Individuals and businesses that use Zillow have updated information on more than 39 million homes and added more than 149 million home photos, creating exclusive home profiles available nowhere else. These profiles include detailed information about homes, including property facts, listing information and purchase and sale data. We provide this information to our users where, when and how they want it, through our industry-leading mobile applications that enable consumers to access our information when they are curbside, viewing homes, and through our websites. Using industry-leading automated valuation models, we provide current home value estimates, or Zestimates, and current rental price estimates, or Rent Zestimates, on approximately 100 million U.S. homes.

We generate revenue from local real estate professionals, primarily on an individual subscription basis, and from mortgage professionals, rental professionals, and brand advertisers. Our revenue includes marketplace revenue, consisting primarily of subscriptions sold to real estate agents based on the number of impressions delivered in zip codes purchased, and advertising sold on a cost per click, or CPC, basis to mortgage lenders, as well as display revenue, which consists of advertising placements sold primarily on a cost per thousand impressions, or CPM, basis.

During the three months ended March 31, 2013, we generated revenue of $39.0 million, as compared to $22.8 million in the three months ended March 31, 2012, an increase of 71%. This increase is primarily the result of an 83% increase in our Premier Agent subscribers to 34,030 as of March 31, 2013 from 18,616 as of March 31, 2012, as well as significant growth in traffic to our mobile applications and websites. There were approximately 46.7 million average monthly unique users of our mobile applications and websites for the three months ended March 31, 2013 compared to 31.8 million average monthly unique users for the three months ended March 31, 2012, representing year-over-year growth of 47%.

In addition, mortgages revenue increased $2.5 million for the three months ended March 31, 2013 compared to the three months ended March 31, 2012, or 104%. Approximately $1.3 million of the increase was the result of our November 2012 acquisition of Mortech, Inc., a company that provides subscription-based mortgage software solutions, including a product and pricing engine and lead management platform. The remaining increase of $1.2 million was primarily a result of an increase in the number of loan requests submitted by consumers in Zillow Mortgage Marketplace. There were approximately 4.5 million mortgage loan requests submitted by consumers for the three months ended March 31, 2013 compared to 2.6 million mortgage loan requests submitted by consumers for the three months ended March 31, 2012, an increase of 74%.

In the year ended December 31, 2012, we completed four acquisitions that align with our growth strategies, including deepening, strengthening and expanding our marketplaces and, in particular, our emerging marketplaces of rentals and mortgages, focusing on consumers and optimizing opportunities for Premier Agent participation. These strategic acquisitions support the expansion of our platform through our suite of marketing and business technology products and services for real estate professionals. Each of the acquisitions occurred after the three months ended March 31, 2012. Thus, we have incurred incremental expenses related to each of these acquisitions in the three months ended March 31, 2013 as compared to the three months ended March 31, 2012.

15

As of March 31, 2013, we had 636 full-time employees, compared to 560 full-time employees as of December 31, 2012.

Key Growth Drivers

To analyze our business performance, determine financial forecasts and help develop long-term strategic plans, we frequently review the following key growth drivers:

Unique Users

Measuring unique users is important to us because our marketplace revenue depends in part on our ability to enable our users to connect with real estate, rental and mortgage professionals, and our display revenue depends in part on the number of impressions delivered. Furthermore, our community of users improves the quality of our living database of homes with their contributions. We count a unique user the first time an individual accesses our mobile applications using a mobile device during a calendar month and the first time an individual accesses one of our websites using a web browser during a calendar month. If an individual accesses our mobile applications using different mobile devices within a given month, the first instance of access by each such mobile device is counted as a separate unique user. If an individual accesses our websites using different web browsers within a given month, the first access by each such web browser is counted as a separate unique user. If an individual accesses more than one of our websites in a single month, the first access to each website is counted as a separate unique user since unique users are tracked separately for each domain. We measure unique users with Google Analytics. Beginning in June 2012, the reported monthly unique users reflect the effect of Zillow’s May 31, 2012 acquisition of RentJuice Corporation. Beginning in December 2012, the reported monthly unique users reflect the effect of Zillow’s December 14, 2012 acquisition of HotPads, Inc.

	Average Monthly Unique Users for the Three Months Ended March 31,				2012 to 2013 % Change
	2013		2012
	(in thousands)
Unique Users		46,652		31,797		47	%

Premier Agent Subscribers

The number of Premier Agent subscribers is an important driver of revenue growth because each subscribing agent pays us a fee to participate in the program. We define a Premier Agent subscriber as an agent with a paid subscription at the end of a period.

	At March 31,				2012 to 2013 % Change
	2013		2012
Premier Agent Subscribers		34,030		18,616		83	%

Basis of Presentation

Revenue

We generate revenue from local real estate professionals, primarily on an individual subscription basis, and from mortgage professionals, rental professionals, and brand advertisers. Our revenue includes marketplace revenue and display revenue.

Marketplace Revenue. Marketplace revenue consists of real estate revenue and mortgages revenue. Real estate revenue primarily includes subscriptions sold to real estate agents under our Premier Agent program, as well as revenue generated by Zillow Rentals. Mortgages revenue primarily includes CPC advertising related to our Zillow Mortgage Marketplace sold to mortgage lenders.

Zillow’s Premier Agent program offers a suite of marketing and business technology solutions to help real estate agents grow their businesses and personal brands. The Premier Agent program allows agents to select products and services that they can tailor to meet their business and advertising needs. The program has three tiers of participation including Premier Platinum, our original flagship subscription product, as well as Premier Gold and Premier Silver, to meet different marketing and business needs of a broad range of agents. All tiers of Premier Agents receive access to a dashboard portal on our website that provides individualized program performance analytics, as well as our personalized website service, and our customer relationship management, or CRM, tool that captures detailed information about each contact made with a Premier Agent through our mobile and web platforms. Our Premier Gold product also includes featured listings whereby the agent’s listings will appear at the top of search results on our mobile and web platforms. Our Premier Platinum product includes the dashboard portal on our website, our personalized website service, our CRM tool, featured listings, and inclusion on our buyer’s agent list, whereby the agent appears as the agent to contact for listings in the purchased zip code.

We charge for our Platinum Premier Agent subscription product based on the number of impressions delivered on our buyer’s agent list in zip codes purchased based on a contracted maximum cost per impression. Our Platinum Premier Agent subscription product includes multiple deliverables which are accounted for as a single unit of accounting, as the delivery or performance of the undelivered elements is based on traffic to our mobile applications and websites. We recognize revenue related to our impression-based

16

Platinum Premier Agent subscription product based on the lesser of (i) the actual number of impressions delivered on our buyer’s agent list during the period multiplied by the contracted maximum cost per impression, or (ii) the contractual maximum spend on a straight-line basis during the contractual period over which the services are delivered, typically over a period of six months or twelve months and then month-to-month thereafter.

We charge a fixed subscription fee for our Premier Gold and Premier Silver subscription products. Subscription advertising revenue for our Premier Gold and Premier Silver subscription products is recognized on a straight-line basis during the contractual period over which the services are delivered, typically over a period of six months and then month-to-month thereafter.

In Zillow Mortgage Marketplace, participating qualified mortgage lenders make a prepayment to gain access to consumers interested in connecting with mortgage professionals. Consumers who request rates for mortgage loans in Zillow Mortgage Marketplace are presented with personalized lender quotes from participating lenders. We only charge mortgage lenders a fee when users click on their links for more information regarding a mortgage loan quote. Mortgage lenders who exhaust their initial prepayment can then prepay additional funds to continue to participate in the marketplace. We recognize revenue when a user clicks on a mortgage advertisement or on a link to obtain additional information about a mortgage loan quote.

Display Revenue. Display revenue primarily consists of graphical mobile and web advertising sold on a CPM basis to advertisers primarily in the real estate industry, including real estate brokerages, home builders, mortgage lenders and home services providers. Our advertising customers also include telecommunications, automotive, insurance and consumer products companies. We recognize display revenue as impressions are delivered to users interacting with our mobile applications or websites. Growth in display revenue depends on continuing growth in traffic to our mobile applications and websites and migration of advertising spend online from traditional broadcast and print media.

Costs and Expenses

Cost of Revenue. Our cost of revenue consists of expenses related to operating our mobile applications and websites, including associated headcount expenses, such as salaries and benefits and share-based compensation expense and bonuses. Cost of revenue also includes credit card fees, ad serving costs paid to third parties, revenue-sharing costs related to our commercial business relationships, and facilities costs allocated on a headcount basis.

Sales and Marketing. Sales and marketing expenses consist of headcount expenses, including salaries, commissions, benefits, share-based compensation expense and bonuses for sales, sales support, customer support, marketing and public relations employees. Sales and marketing expenses also include advertising costs and other sales expenses related to promotional and marketing activities, and facilities costs allocated on a headcount basis.

Technology and Development. Technology and development expenses consist of headcount expenses, including salaries and benefits, share-based compensation expense and bonuses for salaried employees and contractors engaged in the design, development and testing of our mobile applications and websites, equipment and maintenance costs, and facilities costs allocated on a headcount basis. Technology and development expenses also include amortization costs related to capitalized website and development activities, amortization of certain intangibles and other data agreement costs related to the purchase of data used to populate our mobile applications and websites, and amortization of intangible assets recorded in connection with acquisitions.

General and Administrative. General and administrative expenses consist of headcount expenses, including salaries, benefits, share-based compensation expense and bonuses for executive, finance, accounting, legal, human resources, recruiting and administrative support. General and administrative expenses also include legal, accounting and other third-party professional service fees, bad debt expense and facilities costs allocated on a headcount basis.

Other Income

Other income consists primarily of interest income earned on our cash, cash equivalents and investments.

Income Taxes

We are subject to federal and state income taxes in the United States. During the three months ended March 31, 2013 and 2012, we did not have reportable taxable income, and we are not projecting reportable taxable income for the year ending December 31, 2013. We have provided a full valuation allowance against our net deferred tax assets as of March 31, 2013 and December 31, 2012 because, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some or all of the deferred tax asset will not be realized. Therefore, no tax liability or expense has been recorded in the financial statements. We have accumulated federal tax losses of approximately $115.7 million as of December 31, 2012, which are available to reduce future taxable income.

17

Results of Operations

The following tables present our results of operations for the periods indicated and as a percentage of total revenue:

	Three Months Ended March 31,
	2013			2012
	(in thousands, except per share data, unaudited)
Statements of Operations Data:
Revenue	$	38,966		$	22,833
Costs and expenses:
Cost of revenue (exclusive of amortization) (1) (2)		4,130			3,350
Sales and marketing (1)		19,794			8,315
Technology and development (1)		10,611			5,030
General and administrative (1)		8,233			4,445
Total costs and expenses		42,768			21,140
Income (loss) from operations		(3,802	)		1,693
Other income		55			31
Net income (loss)	$	(3,747	)	$	1,724
Net income (loss) per share — basic and diluted	$	(0.11	)	$	0.06
Weighted-average shares outstanding — basic		33,770			28,348
Weighted-average shares outstanding — diluted		33,770			30,994
Other Financial Data:
Adjusted EBITDA (3)	$	5,123		$	5,447

	Three Months Ended March 31,
	2013		2012
	(in thousands, unaudited)
(1)    Includes share-based compensation as follows:
Cost of revenue	$	163	$	85
Sales and marketing		1,227		190
Technology and development		1,034		310
General and administrative		1,722		833
Total	$	4,146	$	1,418
(2)    Amortization of website development costs and intangible assets included in technology and development	$	4,208	$	2,004

(3)    See “Adjusted EBITDA” below for more information and for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles, or GAAP.

18

	Three Months Ended March 31,
	2013			2012
	(unaudited)
Percentage of Revenue:
Revenue		100	%		100	%
Costs and expenses:
Cost of revenue (exclusive of amortization)		11			15
Sales and marketing		51			36
Technology and development		27			22
General and administrative		21			19
Total costs and expenses		110			92
Income (loss) from operations		(10	)		8
Other income		0			0
Net income (loss)		(10	%)		8	%

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed Adjusted EBITDA within this Quarterly Report on Form 10-Q, a non-GAAP financial measure. We have provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key metric used by our management and board of directors to measure operating performance and trends and to prepare and approve our annual budget. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and

• Other companies, including companies in our own industry, may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss) for each of the periods presented:

	Three Months Ended March 31,
	2013			2012
	(in thousands, unaudited)
Reconciliation of Adjusted EBITDA to Net Income (Loss):
Net income (loss)	$	(3,747	)	$	1,724
Other income		(55	)		(31	)
Depreciation and amortization expense		4,779			2,336
Share-based compensation expense		4,146			1,418
Adjusted EBITDA	$	5,123		$	5,447

19

Three Months Ended March 31, 2013 Compared to Three Months Ended March 31, 2012

Revenue

	Three Months Ended March 31,				2012 to 2013 % Change
	2013		2012
	(in thousands, unaudited)
Revenue:
Marketplace revenue:
Real estate	$	26,109	$	14,185		84	%
Mortgages		4,909		2,408		104	%
Total Marketplace revenue		31,018		16,593		87	%
Display revenue		7,948		6,240		27	%
Total revenue	$	38,966	$	22,833		71	%

	Three Months Ended March 31,
	2013			2012
Percentage of Total Revenue:
Marketplace revenue:
Real estate		67	%		62	%
Mortgages		13	%		11	%
Total Marketplace revenue		80	%		73	%
Display revenue		20	%		27	%
Total revenue		100	%		100	%

Overall revenue increased by $16.1 million, or 71%, for the three months ended March 31, 2013 compared to the three months ended March 31, 2012. Marketplace revenue increased by 87%, and display revenue increased by 27%.

Marketplace revenue grew to $31.0 million for the three months ended March 31, 2013 from $16.6 million for the three months ended March 31, 2012, an increase of $14.4 million. Marketplace revenue represented 80% of total revenue for the three months ended March 31, 2013 compared to 73% of total revenue for the three months ended March 31, 2012. The increase in marketplace revenue was primarily attributable to the $11.9 million increase in real estate revenue, which was primarily a result of growth in the number of subscribers in our Premier Agent program to 34,030 as of March 31, 2013 from 18,616 as of March 31, 2012, representing growth of 83%, partially offset by a 2% decrease in average monthly revenue per subscriber. Average monthly revenue per subscriber decreased to $259 for the three months ended March 31, 2013 from $263 for the three months ended March 31, 2012. We believe the decrease in average monthly revenue per subscriber was primarily a result of accelerated growth in the number of Premier Agent subscribers in the three months ended March 31, 2013 compared to the three months ended March 31, 2012, as new Premier Agent subscribers typically buy additional inventory over time and impression-based pricing now allows new Premier Agents to purchase smaller allocations of inventory than under the historical pricing model whereby we charged based upon a percentage of the total Platinum Premier Agent views in the zip code. We calculate our average monthly revenue per subscriber by dividing the revenue generated by our Premier Agent subscription products in the period by the average number of Premier Agent subscribers in the period, divided again by the number of months in the period. The average number of Premier Agent subscribers is derived by calculating the average of the beginning and ending number of Premier Agent subscribers for the period.

Mortgage revenue, which is included in marketplace revenue, also increased by $2.5 million, or 104%. Approximately $1.3 million of the increase was the result of our November 2012 acquisition of Mortech, Inc., a company that provides subscription-based mortgage software solutions, including a product and pricing engine and lead management platform. The remaining increase of $1.2 million was primarily a result of an increase in the number of loan requests submitted by consumers in Zillow Mortgage Marketplace. There were approximately 4.5 million mortgage loan requests submitted by consumers for the three months ended March 31, 2013 compared to 2.6 million mortgage loan requests submitted by consumers for the three months ended March 31, 2012, an increase of 74%. The growth in loan requests submitted by consumers increases the likelihood that users will click on a mortgage advertisement or on a link to obtain additional information about a mortgage loan quote, but there is not a direct correlation between the number of loan requests and mortgage revenue because loan requests do not always result in revenue recognition.

Display revenue was $7.9 million for the three months ended March 31, 2013 compared to $6.2 million for the three months ended March 31, 2012, an increase of $1.7 million. Display revenue represented 20% of total revenue for the three months ended March 31, 2013 compared to 27% of total revenue for the three months ended March 31, 2012. The increase in display revenue was

20

primarily the result of an increase in the number of unique users to our mobile applications and websites, which increased to 46.7 million average monthly unique users for the three months ended March 31, 2013 from 31.8 million average monthly unique users for the three months ended March 31, 2012, representing growth of 47%. The growth in unique users increased the number of graphical display impressions available for sale and advertiser demand for graphical display inventory. Although there is a relationship between the number of average monthly unique users and display revenue, there is not a direct correlation, as the Company does not sell its entire display inventory each period and some of the inventory is sold through networks and not directly through our sales team which impacts the cost per impression we charge to customers. As a result, similar to prior periods, the growth rate in the Company’s average monthly unique users outpaced the growth rate of display revenue.

Cost of Revenue

	Three Months Ended March 31,				2012 to 2013 % Change
	2013		2012
	(in thousands, unaudited)
Cost of revenue	$	4,130	$	3,350		23	%

Cost of revenue was $4.1 million for the three months ended March 31, 2013 compared to $3.4 million for the three months ended March 31, 2012, an increase of $0.8 million, or 23%. The increase in cost of revenue was attributable to increased credit card and ad serving fees of $0.4 million, increased headcount related expenses of $0.3 million, including share-based compensation, driven by growth in headcount, a $0.2 million increase in data center operations costs, a $0.2 million increase in costs related to our revenue share agreements, a $0.5 million increase in various miscellaneous expenses, including connectivity costs and other costs paid to third parties, partially offset by a $0.8 million decrease in revenue sharing costs related to the strategic relationship with Yahoo! Real Estate, which launched in February 2011. We expect our cost of revenue to increase in absolute dollars in future years as we continue to incur more expenses that are associated with growth in revenue.

Sales and Marketing

	Three Months Ended March 31,				2012 to 2013 % Change
	2013		2012
	(in thousands, unaudited)
Sales and marketing	$	19,794	$	8,315		138	%

Sales and marketing expenses were $19.8 million for the three months ended March 31, 2013 compared to $8.3 million for the three months ended March 31, 2012, an increase of $11.5 million, or 138%. The increase was primarily due to a $4.9 million increase in headcount related expenses, including share-based compensation, driven by growth in the size of our sales team to promote our marketplace business, and an increase of $4.7 million in marketing and advertising expenses, primarily related to advertising spend to acquire shoppers across online and offline channels, which supports our growth initiatives. We believe we have considerable opportunity to increase brand awareness and grow traffic through targeted advertising programs. As such, we plan to continue to selectively advertise to consumers and professionals in various online and offline channels that have tested well for us to drive traffic and brand awareness for Zillow. We also incurred a $1.3 million increase in consulting costs to support our marketing and advertising spend, and we incurred a $0.3 million increase in tradeshow expenses, including related travel costs. We expect our sales and marketing expenses to increase in absolute dollars in future years as we continue to expand our sales team and invest more resources in extending our audience through marketing and advertising initiatives.

In addition, in April 2013, pursuant to the terms of a Restricted Stock Unit Award Notice and Restricted Stock Agreement between Zillow and a former employee, 218,071 unvested restricted stock units held by such employee became vested, such that the former employee is entitled to receive one share of Zillow’s Class A common stock for each outstanding restricted stock unit. As a result of the accelerated vesting of the restricted stock units, we expect to record approximately $7.1 million of share-based compensation expense within sales and marketing expense during the three months ending June 30, 2013.

21

Technology and Development

	Three Months Ended March 31,				2012 to 2013 % Change
	2013		2012
	(in thousands, unaudited)
Technology and development	$	10,611	$	5,030		111	%

Technology and development expenses, which include research and development costs, were $10.6 million for the three months ended March 31, 2013 compared to $5.0 million for the three months ended March 31, 2012, an increase of $5.6 million, or 111%. Approximately $2.8 million of the increase related to growth in headcount related expenses, including share-based compensation, as we continue to grow our engineering headcount to support current and future product initiatives. Approximately $2.2 million of the increase was the result of increased amortization of intangible assets, including website development costs, purchased content and acquired intangible assets. The remaining increase of $0.6 million was primarily the result of additional consulting costs and depreciation expense.

Amortization expense included in technology and development for capitalized website development costs was $2.5 million and $1.3 million, respectively, for the three months ended March 31, 2013 and 2012. Amortization expense included in technology and development for purchased data content intangible assets was $0.7 million and $0.5 million, respectively, for the three months ended March 31, 2013 and 2012. Amortization expense included in technology and development related to intangible assets recorded in connection with acquisitions was $1.0 million and $0.2 million, respectively, for the three months ended March 31, 2013 and 2012. Other data content expense was $0.1 million and $0.1 million, respectively, for the three months ended March 31, 2013 and 2012. While we expect our technology and development expenses to increase in absolute dollars over time as we continue to build new mobile and website functionality, we expect these expenses will decrease as a percentage of revenue.

General and Administrative

	Three Months Ended March 31,				2012 to 2013 % Change
	2013		2012
	(in thousands, unaudited)
General and administrative	$	8,233	$	4,445		85	%

General and administrative expenses were $8.2 million for the three months ended March 31, 2013 compared to $4.4 million for the three months ended March 31, 2012, an increase of $3.8 million, or 85%. The increase in general and administrative expenses was a result of a $1.6 million increase in headcount related expenses, including share-based compensation, driven primarily by growth in headcount, a $0.7 million increase in building lease related expenses including rent, utilities and insurance, a $0.5 million increase in professional services fees, a $0.3 million increase in bad debt expense, a $0.2 million increase in travel and meals expense, and a $0.4 million increase in various other miscellaneous expenses, including consulting costs and state and local taxes. We expect general and administrative expenses to increase over time as we continue to expand our business.

Liquidity and Capital Resources

Prior to our initial public offering in July 2011, we funded our operations primarily from the issuance of common and preferred stock. Through 2007, we raised approximately $81.0 million through various offerings of our convertible preferred stock and approximately $5.9 million from the sale of our common stock.

On July 25, 2011, we sold and issued 3,981,300 shares of our Class A common stock, including 519,300 shares of Class A common stock pursuant to the underwriters’ option to purchase additional shares, at a public offering price of $20.00 per share, and we sold and issued 274,999 shares of our Class A common stock at a price of $20.00 per share in a private placement. As a result of the offerings, we received net proceeds of approximately $76.3 million, after deducting underwriting discounts and commissions of approximately $5.6 million and additional offering-related expenses of $3.3 million, for total expenses of $8.9 million. The net offering proceeds were invested into money market funds, certificates of deposit and fixed income U.S. government agency securities.

In September 2012, we sold and issued 3,844,818 shares of our Class A common stock, including 419,818 shares of our Class A common stock pursuant to the underwriters’ option to purchase additional shares, and certain shareholders sold 575,000 shares of our Class A common stock, at a price of $43.00 per share. The nets proceeds for all shares sold by us in the public offering were approximately $156.7 million after deducting underwriting discounts and commissions of approximately $7.9 million and additional offering-related expenses of $0.7 million, for total expenses of $8.6 million. We received no proceeds from the sale of our Class A common stock by the selling shareholders. The net offering proceeds were invested into money market funds and U.S. government agency securities.

As of March 31, 2013 and December 31, 2012, we had cash, cash equivalents and investments of $204.1 million and $203.5 million, respectively. Cash and cash equivalents balances consist of operating cash on deposit with financial institutions and money

22

market funds. Investments as of March 31, 2013 and December 31, 2012 consist of fixed income securities, which include U.S. government agency securities, commercial paper and corporate notes and bonds. Amounts on deposit with third-party financial institutions exceed the applicable Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insurance limits, as applicable. We believe that cash from operations and cash, cash equivalents and investment balances will be sufficient to meet our ongoing operating activities, working capital, capital expenditures and other capital requirements for at least the next 12 months.

During March 2011, we entered into a loan and security agreement with a financial institution to establish a line of credit of $4.0 million. In April 2012, we amended our loan and security agreement to increase our line of credit from $4.0 million to $25.0 million. The line of credit is secured by substantially all our assets, including our intellectual property, and provides us with flexibility for future potential financing needs. The revolving line of credit contains customary financial covenants, including the maintenance of a minimum adjusted quick ratio (calculated as (i) unrestricted cash plus net accounts receivable divided by (ii) current liabilities less the sum of deferred revenue and any indebtedness owing from borrower to bank), measured on a monthly basis, of 1.50 to 1.00, and minimum Adjusted EBITDA, measured on a quarterly basis, of greater than or equal to negative $5 million for each quarterly period through December 31, 2012 and greater than or equal to $0 for each quarterly period thereafter. In addition, the revolving line of credit contains customary restrictions on our ability to, among other things, engage in certain mergers and acquisition transactions and create liens on assets. The revolving line of credit contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of certain covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events and material judgments. The occurrence of an event of default will increase the applicable rate of interest by five percentage points and could result in the acceleration of Zillow’s obligations under the revolving line of credit. As of March 31, 2013, we were in compliance with all covenants, and there were no amounts outstanding under the line of credit. The line of credit is available through April 2016.

In March 2011, we executed a standby letter of credit of $1.5 million in connection with the lease of our Seattle offices, and in July 2012, we amended the standby letter of credit to increase the amount to approximately $1.7 million. In November 2012, we executed a letter of credit of approximately $0.2 million in connection with the lease of our San Francisco office. The letters of credit are secured by our investments and are effective until 60 days after the expiration date of the lease.

The following table presents selected cash flow data for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands, unaudited)
Cash Flow Data:
Cash flows provided by operating activities	$	2,289		$	6,498
Cash flows used in investing activities		(25,438	)		(3,029	)
Cash flows provided by financing activities		5,057			2,905

Cash Flows Provided By Operating Activities

For the three months ended March 31, 2013, net cash provided by operating activities was $2.3 million. This was primarily driven by a net loss of $3.7 million, adjusted by depreciation and amortization expense of $4.8 million, share-based compensation expense of $4.1 million, loss on disposal of property and equipment of $0.5 million, and bad debt expense of $0.4 million. Changes in operating assets and liabilities decreased cash provided by operating activities by $4.1 million.

For the three months ended March 31, 2012, net cash provided by operating activities was $6.5 million. This was driven by net income of $1.7 million, adjusted by depreciation and amortization expense and share-based compensation expense of $2.3 million and $1.4 million, respectively, and an increase in the balance of deferred rent of $0.4 million. Changes in operating assets and liabilities increased cash provided by operating activities by $0.2 million.

Cash Flows Used In Investing Activities

Our primary investing activities include the purchase and maturity of short-term and long-term investments and the purchase of property and equipment and intangible assets.

For the three months ended March 31, 2013, net cash used in investing activities was $25.4 million. This was the result of $18.8 million of net purchases of investments and $6.6 million of purchases for property and equipment and intangible assets.

For the three months ended March 31, 2012, we used $3.0 million of net cash in investing activities, which was a result of $3.0 million for the purchase of property and equipment and intangible assets.

23

Cash Flows Provided By Financing Activities

For the three months ended March 31, 2013 and 2012, our financing activities resulted entirely from the exercise of employee stock options. The proceeds from the issuance of Class A common stock from the exercise of stock options for the three months ended March 31, 2013 and 2012 was $5.1 million and $2.9 million, respectively.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2013.

Contractual Obligations

The following table provides a summary of our contractual obligations as of March 31, 2013:

	Payment Due By Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
	(in thousands)
Operating lease obligations	$	40,561	$	4,027	$	8,585	$	9,872	$	18,077
Purchase obligations		15,763		4,091		8,366		3,306		—
Total	$	56,324	$	8,118	$	16,951	$	13,178	$	18,077

We have various operating leases for office space and equipment. In March 2011, we entered into a lease effective through November 2022 for approximately 66,000 square feet of office space that has housed our principal offices in Seattle, Washington, since August 2011. In June 2012, we entered into a lease amendment for our corporate headquarters in Seattle, Washington which increases the rentable area of the premises by 21,575 square feet. In April 2012, we entered into an operating lease in Irvine, California, for 20,025 square feet under which we are obligated to make escalating monthly lease payments which began in August 2012 and continue through July 2022. In November 2012, we entered into an operating lease in San Francisco, California, for 18,353 square feet under which we are obligated to make escalating monthly lease payments which began in December 2012 and continue through November 2018. We lease additional office space in San Francisco, California, Chicago, Illinois, Lincoln, Nebraska, and New York, New York. We also have purchase obligations for content related to our mobile applications and websites. We do not have any debt or capital lease obligations. The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a significant penalty are not included in the table above.

In April 2013, we amended our operating lease for our principal offices in Seattle, Washington, to increase the rentable area of the premises by 22,583 square feet as of October 1, 2013, and to increase the rentable area of the premises by an additional 22,583 square feet as of September 1, 2014, for which we are obligated to make escalating monthly lease payments beginning in January 2014 and terminating in November 2022. Total future minimum payments for the additional space as of March 31, 2013 are approximately $15.8 million. In connection with the April 2013 amendment to our operating lease, we amended our standby letter of credit to increase the amount from approximately $1.7 million to approximately $2.0 million.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. For information on our critical accounting policies and estimates, see Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the year ended December 31, 2012. There have been no material changes to our critical accounting policies and estimates as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012.

24

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk, see Part 2, Item 7A (Quantitative and Qualitative Disclosures About Market Risk) in our Annual Report on Form 10-K for the year ended December 31, 2012. Our exposures to market risk have not changed materially since December 31, 2012.

25

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of March 31, 2013. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective as of March 31, 2013.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

26

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material developments in legal proceedings during the quarter ended March 31, 2013. For a description of previously reported legal proceedings, refer to Part I, Item 3 (Legal Proceedings) of our Annual Report on Form 10-K for the year ended December 31, 2012.

From time to time, we are involved in litigation and claims that arise in the ordinary course of business and although we cannot be certain of the outcome of any such litigation or claims, nor the amount of damages and exposure that we could incur, we currently believe that the final disposition of such matters will not have a material effect on our business, financial position, results of operations or cash flow. This forward-looking statement is based on management’s current understanding of the relevant law and facts; and it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of judges and juries. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

There have not been any material changes to the risk factors affecting our business, financial condition or future results from those set forth in Part I, Item 1A (Risk Factors) in our Annual Report on Form 10-K for the year ended December 31, 2012. However, you should carefully consider the factors discussed in our Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

On March 26, 2013, in connection with a sponsorship agreement involving an equity-based payment to a non-employee recipient, we issued 3,673 restricted shares of our Class A common stock to the recipient. This transaction was exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act and Regulation D promulgated thereunder. The recipient of restricted shares of our Class A common stock in this transaction represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions. The recipient had adequate access, through their relationships with us, to information about Zillow.

There were no other sales of unregistered securities during the three months ended March 31, 2013.

Use of Proceeds from Registered Securities

On July 25, 2011 in connection with our initial public offering of our Class A common stock (“IPO”), we sold and issued 3,981,300 shares of our Class A common stock, including 519,300 shares of Class A common stock pursuant to the underwriters’ option to purchase additional shares, at a public offering price of $20.00 per share. The aggregate gross proceeds for all shares sold by us in the IPO were $79,626,000. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-173570), which was declared effective by the SEC on July 19, 2011, and a prospectus filed pursuant to Rule 424(b) of the Securities Act. We used all of our net offering proceeds in a manner consistent with our planned use of proceeds from our IPO as described in our final prospectus filed with the SEC pursuant to Rule 424(b).

Item 4. Mine Safety Disclosures

Not applicable.

28

Item 6. Exhibits

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.

Exhibit Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS***	XBRL Instance Document.
101.SCH***	XBRL Taxonomy Extension Schema Document.
101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB***	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document.

*** Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability under these Sections.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 8, 2013	ZILLOW, INC.
	By:	/s/ CHAD M. COHEN
	Name:	Chad M. Cohen
	Title:	Chief Financial Officer and Treasurer

30

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13-14(A) OF THE SECURITIES

EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Spencer M. Rascoff, certify that:

1. I have reviewed this report on Form 10-Q of Zillow, Inc. for the fiscal quarter ended March 31, 2013;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ SPENCER M. RASCOFF
Name:	Spencer M. Rascoff
Title:	Chief Executive Officer
Date:	May 8, 2013

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13-14(A) OF THE SECURITIES

EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chad M. Cohen, certify that:

1. I have reviewed this report on Form 10-Q of Zillow, Inc. for the fiscal quarter ended March 31, 2013;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ CHAD M. COHEN
Name:	Chad M. Cohen
Title:	Chief Financial Officer
Date:	May 8, 2013

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Zillow, Inc. (the “Company”) for the fiscal quarter ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Spencer M. Rascoff, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ SPENCER M. RASCOFF
Name:	Spencer M. Rascoff
Title:	Chief Executive Officer
Date:	May 8, 2013

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Zillow, Inc. (the “Company”) for the fiscal quarter ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chad M. Cohen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ CHAD M. COHEN
Name:	Chad M. Cohen
Title:	Chief Financial Officer
Date:	May 8, 2013

XML

Summary of Restricted Stock Award Activity (Detail) (Restricted Stock, USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Restricted Stock
Shares of Restricted Stock
Unvested outstanding, beginning balance	340,103	75,000
Granted	3,673	299,213
Vested	(9,923)	(34,110)
Forfeited or cancelled	(1,270)	0
Unvested outstanding, ending balance	332,583	340,103
Weighted-Average Grant-Date Fair Value
Unvested outstanding, beginning balance	$ 30.34	$ 29.69
Granted	$ 44.66	$ 30.43
Vested	$ 35.23	$ 29.41
Forfeited or cancelled	$ 27.75	$ 0.00
Unvested outstanding, ending balance	$ 30.39	$ 30.34

XML

Subsequent Events - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended		3 Months Ended					1 Months Ended			3 Months Ended
	Nov. 30, 2012 sqft	Apr. 30, 2012 sqft	Jun. 30, 2012 sqft	Mar. 31, 2012 sqft	Mar. 31, 2013	Jul. 30, 2012	Mar. 31, 2011	Sep. 01, 2014 Subsequent Events sqft	Oct. 01, 2013 Subsequent Events sqft	Apr. 30, 2013 Subsequent Events	Jun. 30, 2013 Subsequent Events
Subsequent Event [Line Items]
Number of restricted stock units to be vested										218,071
Terms of restricted stock unit award										The former employee is entitled to receive one share of Zillow's Class A common stock for each outstanding restricted stock unit.
Expected share-based compensation expense											$ 7.1
Rentable area of the premises	18,353	20,025	21,575	66,000				22,583	22,583
Outstanding letters of credit	$ 0.2				$ 2.0	$ 1.7	$ 1.5

XML

Purchase Commitments for Content Related to Mobile Applications and Websites (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Long-term Purchase Commitment [Line Items]
Remainder of 2013	$ 3,062
2014	4,157
2015	4,291
2016	3,435
2017	818
All future years	0
Total future purchase commitments	$ 15,763

XML

Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Amortization of website development costs and intangible assets	$ 4,208	$ 2,004
Technology and Development Expense
Finite-Lived Intangible Assets [Line Items]
Amortization of website development costs and intangible assets	$ 1,700	$ 700

XML

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2013

Future Minimum Payments for All Operating Leases

Future minimum payments for all operating leases as of March 31, 2013 are as follows (in thousands):

Remainder of 2013	$	2,959
2014		4,101
2015		4,347
2016		4,834
2017		4,985
All future years		19,335
Total future minimum lease payments	$	40,561

Purchase Commitments for Content Related to Mobile Applications and Websites

The amounts due for this content as of March 31, 2013 are as follows (in thousands):

Remainder of 2013	$	3,062
2014		4,157
2015		4,291
2016		3,435
2017		818
All future years		0
Total future purchase commitments	$	15,763

XML

Dilutive securities included in Computation of Earnings Per Share (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items]
Class A common stock equivalents included in the computation of diluted net income (loss) per share	0	2,646
Stock Options
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items]
Class A common stock equivalents included in the computation of diluted net income (loss) per share	0	2,580
Restricted Stock
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items]
Class A common stock equivalents included in the computation of diluted net income (loss) per share	0	66
Restricted Stock Units
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items]
Class A common stock equivalents included in the computation of diluted net income (loss) per share	0	0

XML

Summary of Stock Option Activity (Detail) (Stock Options, USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Available for Grant, Beginning Balance	321,678	979,024
Options Available for Grant, Authorized increase in plan shares	1,387,064	1,068,374
Options Available for Grant, Granted	(1,585,758)	(1,884,079)
Options Available for Grant, Exercised	0	0
Options Available for Grant, Forfeited or cancelled	68,831	158,359
Options Available for Grant, Ending Balance	191,815	321,678	979,024
Number of Shares Subject to Existing Options, Beginning Balance	5,462,672	5,361,256
Number of Shares Subject to Existing Options, Authorized increase in plan shares	0	0
Number of Shares Subject to Existing Options, Granted	1,585,758	1,884,079
Number of Shares Subject to Existing Options, Exercised	(601,252)	(1,624,304)
Number of Shares Subject to Existing Options, Forfeited or cancelled	(68,831)	(158,359)
Number of Shares Subject to Existing Options, Ending Balance	6,378,347	5,462,672	5,361,256
Weighted-Average Exercise Price Per Share, Beginning Balance	$ 14.48	$ 6.23
Number of Shares Subject to Existing Options, Vested and exercisable	2,133,492
Weighted-Average Exercise Price Per Share, Authorized increase in plan shares	$ 0	$ 0
Weighted-Average Exercise Price Per Share, Granted	$ 36.97	$ 30.01
Weighted-Average Exercise Price Per Share, Exercised	$ 8.41	$ 4.59
Weighted-Average Exercise Price Per Share, Forfeited or cancelled	$ 25.92	$ 21.42
Weighted-Average Exercise Price Per Share, Ending Balance	$ 20.52	$ 14.48	$ 6.23
Weighted-Average Exercise Price Per Share, Vested and exercisable	$ 8.50
Weighted-Average Remaining Contractual Life (Years)	5 years 6 months 15 days	4 years 10 months 17 days	4 years 6 months 4 days
Weighted-Average Remaining Contractual Life (Years), Vested and exercisable	3 years 8 months 23 days
Aggregate Intrinsic Value	$ 217,875,348	$ 78,912,364	$ 89,749,207
Aggregate Intrinsic Value Vested, and exercisable	$ 98,502,329

XML

Revenue Categories (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues:
Revenues	$ 38,966	$ 22,833
Display revenue
Revenues:
Revenues	7,948	6,240
Marketplace revenue
Revenues:
Revenues	31,018	16,593
Marketplace revenue | Real Estate Revenue
Revenues:
Revenues	26,109	14,185
Marketplace revenue | Mortgages Revenue
Revenues:
Revenues	$ 4,909	$ 2,408

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Note 3. Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

We applied the following methods and assumptions in estimating our fair value measurements:

Cash equivalents — Cash equivalents are comprised of highly liquid money market funds with original maturities of less than three months. The fair value measurement of these assets is based on quoted market prices in active markets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy.

Short-term and long-term investments — Our investments consist of fixed income securities, which include U.S. government agency securities, commercial paper, and corporate notes and bonds. Investments with maturities greater than three months but less than one year are classified as short-term investments. Investments with maturities greater than one year are classified as long-term investments. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Our U.S. government agency securities are classified as Level 1 in the fair value hierarchy. Our commercial paper and corporate notes and bonds are classified as Level 2 in the fair value hierarchy. Our short-term and long-term investments are classified as held-to-maturity and are recorded at amortized cost, as we do not intend to sell the investments, and it is not more likely than not that we will be required to sell these investments prior to maturity. The amortized cost of our short-term and long-term investments approximates their fair value.

Of the short-term investments and long-term investments on hand as of March 31, 2013, 65.3% mature on or prior to March 31, 2014, and the remaining 34.7% mature on or prior to March 31, 2015.

The following tables present the balances of assets measured at fair value on a recurring basis as of the dates presented (in thousands):

	March 31, 2013
	Total		Level 1		Level 2
Cash equivalents:
Money market funds	$	125,478	$	125,478	$	0
Short-term investments:
U.S government agency securities		33,083		33,083		0
Commercial paper		6,998		0		6,998
Corporate notes and bonds		7,021		0		7,021
Long-term investments:
U.S government agency securities		23,803		23,803		0
Corporate notes and bonds		1,278		0		1,278
Total	$	197,661	$	182,364	$	15,297

	December 31, 2012
	Total		Level 1		Level 2
Cash equivalents:
Money market funds	$	143,246	$	143,246	$	0
Short-term investments:
U.S government agency securities		26,085		26,085		0
Commercial paper		16,965		0		16,965
Corporate notes and bonds		1,004		0		1,004
Long-term investments:
U.S government agency securities		7,079		7,079		0
Corporate notes and bonds		2,310		0		2,310
Total	$	196,689	$	176,410	$	20,279

We did not have any Level 3 assets or liabilities measured at fair value on a recurring basis as of March 31, 2013 or December 31, 2012.

XML

Net Income (Loss) Per Share Attributable to Common Shareholders - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2013
Stock Option
Net Income Loss Per Common Share [Line Items]
Number of antidilutive shares excluded from computation of diluted net loss per share	2,856,087
Class A Common Stock | Restricted Stock
Net Income Loss Per Common Share [Line Items]
Number of antidilutive shares excluded from computation of diluted net loss per share	66,455
Class A Common Stock | Restricted Stock Units
Net Income Loss Per Common Share [Line Items]
Number of antidilutive shares excluded from computation of diluted net loss per share	63,065

XML

Fair Value Measurement of Assets on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 197,661	$ 196,689
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	125,478	143,246
U.S government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	33,083	26,085
Long-term investments	23,803	7,079
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	6,998	16,965
Corporate Notes and Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	7,021	1,004
Long-term investments	1,278	2,310
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	182,364	176,410
Fair Value, Inputs, Level 1 | Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	125,478	143,246
Fair Value, Inputs, Level 1 | U.S government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	33,083	26,085
Long-term investments	23,803	7,079
Fair Value, Inputs, Level 1 | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Fair Value, Inputs, Level 1 | Corporate Notes and Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Long-term investments	0	0
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	15,297	20,279
Fair Value, Inputs, Level 2 | Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Fair Value, Inputs, Level 2 | U.S government agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Long-term investments	0	0
Fair Value, Inputs, Level 2 | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	6,998	16,965
Fair Value, Inputs, Level 2 | Corporate Notes and Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	7,021	1,004
Long-term investments	$ 1,278	$ 2,310

XML

Fair Value Measurements - Additional Information (Detail) (USD $)	3 Months Ended			3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013 Fair Value, Inputs, Level 3	Dec. 31, 2012 Fair Value, Inputs, Level 3	Mar. 31, 2013 Mature in 2014	Mar. 31, 2013 Mature in 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Original maturities date of money market funds	3 months
Investment classification	Investments with maturities greater than three months but less than one year are classified as short-term investments. Investments with maturities greater than one year are classified as long-term investments.
Investment Maturity, Percentage				65.30%	34.70%
Investment Maturity, Year				2014	2015
Assets measured at fair value on recurring basis		$ 0	$ 0
Liabilities measured at fair value on recurring basis		$ 0	$ 0

XML

Commitments and Contingencies - Additional Information (Detail) (USD $)	1 Months Ended		3 Months Ended				12 Months Ended
	Nov. 30, 2012 sqft	Apr. 30, 2012 sqft	Dec. 31, 2013	Mar. 31, 2013	Jun. 30, 2012 sqft	Mar. 31, 2012 sqft	Dec. 31, 2012	Jul. 30, 2012	Mar. 31, 2011
Schedule Of Commitments And Contingencies [Line Items]
Rentable area of the premises	18,353	20,025			21,575	66,000
Lease expiration period							2013-02
Rent expense				$ 1,100,000		$ 500,000
Non-cancelable purchase commitments for content				15,763,000
Loan and security agreement to establish a line of credit		25,000,000							4,000,000
Revolving line of credit minimum adjusted quick ratio				1.00%
Revolving line of credit maximum adjusted quick ratio				1.50%
Revolving line of credit minimum adjusted EBITDA before specified period				(5,000,000)
Revolving line of credit minimum adjusted EBITDA after specified period				0
Increase in percentage points in case of default				5.00%
Outstanding letters of credit	$ 200,000			$ 2,000,000				$ 1,700,000	$ 1,500,000
Expiration date of lease			60 days

XML

Detail of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipment	$ 54,801	$ 49,147
Less: accumulated amortization and depreciation	(38,028)	(35,513)
Property and equipment, net	16,773	13,634
Website Development Costs
Property, Plant and Equipment [Line Items]
Property and equipment	36,836	33,448
Computer Equipment
Property, Plant and Equipment [Line Items]
Property and equipment	8,717	8,380
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property and equipment	1,659	831
Software
Property, Plant and Equipment [Line Items]
Property and equipment	1,265	1,209
Construction in Progress
Property, Plant and Equipment [Line Items]
Property and equipment	3,603	3,093
Office Equipment, Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Property and equipment	$ 2,721	$ 2,186

XML

Property and Equipment, Net - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Property, Plant and Equipment [Line Items]
Amortization and depreciation expense related to property and equipment other than website development costs	$ 0.6	$ 0.3
Capitalization of website development costs	3.9	2.3
Amortization expense for website development costs included in technology and development expenses	$ 2.5	$ 1.3

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed financial statements should be read in conjunction with the audited financial statements and accompanying notes as of and for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 22, 2013. The condensed balance sheet as of December 31, 2012, included herein, was derived from the audited financial statements as of that date.

The unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2013, our results of operations for the three month periods ended March 31, 2013 and 2012, and our cash flows for the three months ended March 31, 2013 and 2012. The results of the three month period ended March 31, 2013 is not necessarily indicative of the results to be expected for the year ended December 31, 2013 or for any interim period or for any other future year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates are used for revenue recognition, the allowance for doubtful accounts, website development costs, goodwill, recoverability of intangible assets with definite lives and other long-lived assets, and for share-based compensation. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected.

Recently Issued Accounting Standards

In February 2013, the Financial Accounting Standards Board (“FASB”) issued guidance on the reporting of amounts reclassified out of accumulated other comprehensive income. An entity must report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. This guidance is effective for interim and annual reporting periods beginning after December 15, 2012, with earlier adoption permitted, and must be applied prospectively. We adopted this guidance on January 1, 2013. The adoption of this guidance did not have any impact on our financial position, results of operations or cash flows as we do not have any items of other comprehensive income in any period presented.

XML

Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Cost	$ 30,000	$ 29,315
Accumulated Amortization	(9,759)	(8,067)
Net	20,241	21,248
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Cost	14,335	14,335
Accumulated Amortization	(2,218)	(1,534)
Net	12,117	12,801
Purchased Content
Finite-Lived Intangible Assets [Line Items]
Cost	9,729	9,044
Accumulated Amortization	(6,663)	(6,015)
Net	3,066	3,029
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Cost	4,875	4,875
Accumulated Amortization	(657)	(387)
Net	4,218	4,488
Trademarks
Finite-Lived Intangible Assets [Line Items]
Cost	1,061	1,061
Accumulated Amortization	(221)	(131)
Net	$ 840	$ 930

XML

Summary of Restricted Stock Units Activity (Detail) (Restricted Stock Units, USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Restricted Stock Units
Restricted Stock Units
Unvested outstanding, beginning balance	296,004	0
Granted	0	300,961
Vested	0	0
Forfeited or cancelled	(6,535)	(4,957)
Unvested outstanding, ending balance	289,469	296,004
Weighted-Average Grant-Date Fair Value
Unvested outstanding, beginning balance	$ 38.76	$ 0.00
Granted	$ 0.00	$ 38.77
Vested	$ 0	$ 0
Forfeited or cancelled	$ 39.69	$ 39.69
Unvested outstanding, ending balance	$ 38.74	$ 38.76

XML

CONDENSED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 131,948	$ 150,040
Short-term investments	47,102	44,054
Accounts receivable, net of allowance for doubtful accounts of $1,236 and $965 at March 31, 2013 and December 31, 2012, respectively	9,499	8,655
Prepaid expenses and other current assets	4,445	2,652
Total current assets	192,994	205,401
Long-term investments	25,081	9,389
Property and equipment, net	16,773	13,634
Goodwill	54,284	54,284
Intangible assets, net	20,241	21,248
Other assets	254	279
Total assets	309,627	304,235
Current liabilities:
Accounts payable	4,399	3,158
Accrued expenses and other current liabilities	3,884	6,318
Accrued compensation and benefits	3,238	2,514
Deferred revenue	7,779	8,349
Deferred rent, current portion	126	94
Total current liabilities	19,426	20,433
Deferred rent, net of current portion	3,651	3,485
Commitments and contingencies (Note 10)
Shareholders' equity:
Additional paid-in capital	361,961	351,981
Accumulated deficit	(75,415)	(71,668)
Total shareholders' equity	286,550	280,317
Total liabilities and shareholders' equity	309,627	304,235
Convertible Preferred Stock
Shareholders' equity:
Preferred stock
Class A Common Stock
Shareholders' equity:
Common Stock	3	3
Class B Common Stock
Shareholders' equity:
Common Stock	$ 1	$ 1

XML

Future Minimum Payments for All Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Leases Future Minimum Payments [Line Items]
Remainder of 2013	$ 2,959
2014	4,101
2015	4,347
2016	4,834
2017	4,985
All future years	19,335
Total future minimum lease payments	$ 40,561

XML

CONDENSED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating activities
Net income (loss)	$ (3,747)	$ 1,724
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	4,779	2,336
Share-based compensation expense	4,146	1,418
Loss on disposal of property and equipment	495	63
Bad debt expense	414	99
Deferred rent	198	411
Amortization of bond premium	69	199
Changes in operating assets and liabilities:
Accounts receivable	(1,258)	(601)
Prepaid expenses and other assets	(1,768)	1,085
Accounts payable	1,241	(413)
Accrued expenses	(1,710)	(587)
Deferred revenue	(570)	764
Net cash provided by operating activities	2,289	6,498
Investing activities
Proceeds from maturities of investments	5,000
Purchases of investments	(23,809)
Purchases of property and equipment	(5,944)	(2,525)
Purchases of intangible assets	(685)	(504)
Net cash used in investing activities	(25,438)	(3,029)
Financing activities
Proceeds from exercise of Class A common stock options	5,057	2,905
Net cash provided by financing activities	5,057	2,905
Net increase (decrease) in cash and cash equivalents during period	(18,092)	6,374
Cash and cash equivalents at beginning of period	150,040	47,926
Cash and cash equivalents at end of period	131,948	54,300
Noncash transactions:
Capitalized share-based compensation	777	383
Write-off of fully depreciated property and equipment	$ 485

XML

Shareholders' Equity - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended	12 Months Ended
	Sep. 30, 2012	Mar. 31, 2013	Dec. 31, 2012
Class of Stock [Line Items]
Number of common stock converted		193,900	2,065,787
Net proceeds from issuance of common stock	$ 156.7
Class A Common Stock
Class of Stock [Line Items]
Common stock holders voting right		1
Conversion of common stock conversion ratio			1
Issuance of Class A common stock, shares	3,844,818
Class A Common Stock | Underwriters
Class of Stock [Line Items]
Issuance of Class A common stock, shares	419,818
Class A Common Stock | Private Placement
Class of Stock [Line Items]
Issuance of Class A common stock, shares	575,000
Class A common stock at an offering Price	$ 43.00
Class B Common Stock
Class of Stock [Line Items]
Common stock holders voting right			10

XML

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Intangible Assets

The following tables present the detail of intangible assets subject to amortization as of the dates presented (in thousands):

	March 31, 2013
	Cost		Accumulated Amortization			Net
Developed technology	$	14,335	$	(2,218	)	$	12,117
Purchased content		9,729		(6,663	)		3,066
Customer relationships		4,875		(657	)		4,218
Trademarks		1,061		(221	)		840
Total	$	30,000	$	(9,759	)	$	20,241

	December 31, 2012
	Cost		Accumulated Amortization			Net
Developed technology	$	14,335	$	(1,534	)	$	12,801
Purchased content		9,044		(6,015	)		3,029
Customer relationships		4,875		(387	)		4,488
Trademarks		1,061		(131	)		930
Total	$	29,315	$	(8,067	)	$	21,248

XML

Share-Based Awards - Additional Information (Detail) (USD $)	3 Months Ended			12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended		12 Months Ended	3 Months Ended		1 Months Ended	12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Stock Options	Dec. 31, 2012 Stock Options	Mar. 31, 2013 Restricted Stock	Dec. 31, 2012 Restricted Stock	Mar. 31, 2013 Restricted Stock 2011 Plan	Mar. 31, 2013 Restricted Stock Units	Dec. 31, 2012 Restricted Stock Units	Mar. 31, 2013 Restricted Stock Units 2011 Plan	Mar. 31, 2013 Non Employee Director Rewards	Jan. 31, 2013 Chief Executive Officer [Member]	Dec. 31, 2012 Chief Executive Officer [Member]
Stock Based Awards [Line Items]
Substituted incentive stock options granted in connection with acquisition	15,143
Exercise price per share fixed	100.00%
Share based compensation arrangement by share based payment, award minimum exercisable period	3 months
Share based compensation arrangement by share based payment, award maximum exercisable period	12 months
Term of Award from date of grant	10 years
Percentage of Vested Restricted Stock Unit	25.00%
Options granted to date under various plan			Options granted under the 2011 Plan are typically granted with seven-year terms and typically vest 25% after 12 months and ratably thereafter over the next 36 months,									One-eighth of the total number of shares subject to the option will vest and become exercisable on the three-year anniversary of the date of grant. An additional 1/96th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable six years from the date of grant. One-eighth of the total number of shares subject to the option will vest and become exercisable on the four-year anniversary of the date of grant. An additional 1/96th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable seven years from the date of grant.	One-eighth of the total number of shares subject to the option will vest and become exercisable on the one-year anniversary of the date of grant. An additional 1/96th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable four years from the date of grant. One-eighth of the total number of shares subject to the option will vest and become exercisable on the two-year anniversary of the date of grant. An additional 1/96th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable five years from the date of grant.
Number of restricted stock excluded					3,673	299,213	144,270	0	300,961	289,469
Stock option of Class A common stock granted			1,585,758	1,884,079							30,690	500,000	500,000
Fair value of option granted	$ 16.28	$ 12.91									$ 16.29	$ 19.00	$ 13.28
Expected volatility	51.00%	51.00%									51.00%	51.00%	49.00%
Risk free interest rate	0.70%	0.76%									0.36%	0.70%	0.60%
Weighted-average expected life	4 years 6 months 29 days	4 years 6 months 29 days									3 years 6 months	7 years 3 months 18 days	6 years
Recognized compensation cost	$ 4,146,000	$ 1,418,000									$ 500,000
Contractual life of award												10 years	7 years
Total unrecognized compensation cost					$ 9,500,000			$ 9,200,000

XML

Net Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Dilutive securities included in Computation of Earnings Per Share

For the periods presented, the following Class A common stock equivalents were included in the computation of diluted net income (loss) per share because they had a dilutive impact (in thousands):

	Three Months Ended March 31,
	2013		2012
Class A common stock issuable upon the exercise of stock options		0		2,580
Class A common stock underlying unvested restricted stock		0		66
Class A common stock underlying unvested restricted stock units		0		0
Total Class A common stock equivalents		0		2,646

XML

Organization and Description of Business

3 Months Ended

Mar. 31, 2013

Organization and Description of Business

Note 1. Organization and Description of Business

Zillow, Inc. was incorporated as a Washington corporation effective December 13, 2004, and we launched the initial version of our website, Zillow.com, in February 2006. Zillow operates the leading real estate and home-related information marketplaces on mobile and the Web, with a complementary portfolio of brands and products to help people find vital information about homes, and connect with local professionals. In addition to our websites, including Zillow.com, we also own and operate Zillow Mobile, our suite of home-related mobile applications, Zillow Mortgage Marketplace, where borrowers connect with lenders to find loans and get competitive mortgage rates, Zillow Digs, our home improvement marketplace where consumers can find visual inspiration and local cost estimates, Zillow Rentals, a marketplace and suite of tools for rental professionals, Postlets, Diverse Solutions, Buyfolio, Mortech and HotPads. Zillow provides products and services to help consumers through every stage of homeownership – buying, selling, renting, borrowing and remodeling.

Certain Significant Risks and Uncertainties

We operate in a dynamic industry and, accordingly, can be affected by a variety of factors. For example, we believe that changes in any of the following areas could have a significant negative effect on us in terms of our future financial position, results of operations or cash flows: rates of revenue growth; engagement and usage of our products; scaling and adaptation of existing technology and network infrastructure; competition in our market; management of our growth; acquisitions and investments; qualified employees and key personnel; protection of our brand and intellectual property; changes in government regulation affecting our business; intellectual property infringement and other claims; protection of customers’ information and privacy concerns; and security measures related to our mobile applications and websites, among other things.

XML

CONDENSED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Accounts receivable, allowance for doubtful accounts	$ 1,236	$ 965
Convertible Preferred Stock
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	30,000,000	30,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Class A Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	27,208,296	26,414,414
Common stock, shares outstanding	27,208,296	26,414,414
Class B Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	15,000,000	15,000,000
Common stock, shares issued	7,268,626	7,462,526
Common stock, shares outstanding	7,268,626	7,462,526

XML

Segment Information and Revenue

3 Months Ended

Mar. 31, 2013

Segment Information and Revenue

Note 11. Segment Information and Revenue

We have one reportable segment. Our reportable segment has been identified based on how our chief operating decision-maker manages our business, makes operating decisions and evaluates operating performance. The chief executive officer acts as the chief operating decision-maker and reviews financial and operational information on an entity-wide basis. We have one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components. Accordingly, we have determined that we have a single reporting segment and operating unit structure.

The chief executive officer reviews information about revenue categories, including marketplace revenue and display revenue. The following table presents our revenue categories during the periods presented (in thousands):

	Three Months Ended March 31,
	2013		2012
Marketplace revenue:
Real estate	$	26,109	$	14,185
Mortgages		4,909		2,408
Total Marketplace revenue		31,018		16,593
Display revenue		7,948		6,240
Total revenue	$	38,966	$	22,833

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013 Class A Common Stock	Apr. 30, 2013 Class B Common Stock
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	Z
Entity Registrant Name	ZILLOW INC
Entity Central Index Key	0001334814
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		27,263,123	7,268,626

XML

Subsequent Events

3 Months Ended

Mar. 31, 2013

Subsequent Events

Note 12. Subsequent Events

In April 2013, pursuant to the terms of a Restricted Stock Unit Award Notice and Restricted Stock Agreement between Zillow and a former employee, 218,071 unvested restricted stock units held by such employee became vested, such that the former employee is entitled to receive one share of Zillow’s Class A common stock for each outstanding restricted stock unit. As a result of the accelerated vesting of the restricted stock units, we expect to record approximately $7.1 million of share-based compensation expense within sales and marketing expense during the three months ended June 30, 2013.

In April 2013, we amended our operating lease for our principal offices in Seattle, Washington, to increase the rentable area of the premises by 22,583 square feet as of October 1, 2013, and to increase the rentable area of the premises by an additional 22,583 square feet as of September 1, 2014, for which we are obligated to make escalating monthly lease payments beginning in January 2014 and terminating in November 2022. Future minimum payments for the additional space are as follows (in thousands):

Remainder of 2013	$	0
2014		909
2015		1,720
2016		1,765
2017		1,810
All future years		9,557
Total future minimum lease payments	$	15,761

In connection with the April 2013 amendment to our operating lease, we amended our standby letter of credit to increase the amount from approximately $1.7 million to approximately $2.0 million.

XML

CONDENSED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Revenue	$ 38,966		$ 22,833
Costs and expenses:
Cost of revenue (exclusive of amortization)	4,130	[1]	3,350	[1]
Sales and marketing	19,794		8,315
Technology and development	10,611		5,030
General and administrative	8,233		4,445
Total costs and expenses	42,768		21,140
Income (loss) from operations	(3,802)		1,693
Other income	55		31
Net income (loss)	$ (3,747)		$ 1,724
Net income (loss) per share - basic and diluted	$ (0.11)		$ 0.06
Weighted-average shares outstanding - basic	33,770		28,348
Weighted-average shares outstanding - diluted	33,770		30,994

[1] Amortization of website development costs and intangible assets included in technology and development

XML

Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes

Note 6. Income Taxes

We are subject to federal and state income taxes in the United States. During the three months ended March 31, 2013 and 2012, we did not have reportable taxable income, and we are not projecting reportable taxable income for the year ending December 31, 2013. We have provided a full valuation allowance against our net deferred tax assets as of March 31, 2013 and December 31, 2012 because, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some or all of the deferred tax assets will not be realized. Therefore, no tax liability or expense has been recorded in the financial statements. We have accumulated tax losses of approximately $115.7 million as of December 31, 2012, which are available to reduce future taxable income.

XML

Intangible Assets

3 Months Ended

Mar. 31, 2013

Intangible Assets

Note 5. Intangible Assets

The following tables present the detail of intangible assets subject to amortization as of the dates presented (in thousands):

	March 31, 2013
	Cost		Accumulated Amortization			Net
Developed technology	$	14,335	$	(2,218	)	$	12,117
Purchased content		9,729		(6,663	)		3,066
Customer relationships		4,875		(657	)		4,218
Trademarks		1,061		(221	)		840
Total	$	30,000	$	(9,759	)	$	20,241

	December 31, 2012
	Cost		Accumulated Amortization			Net
Developed technology	$	14,335	$	(1,534	)	$	12,801
Purchased content		9,044		(6,015	)		3,029
Customer relationships		4,875		(387	)		4,488
Trademarks		1,061		(131	)		930
Total	$	29,315	$	(8,067	)	$	21,248

Amortization expense recorded for intangible assets for the three months ended March 31, 2013 and 2012 was $1.7 million and $0.7 million, respectively. These amounts are included in technology and development expenses.

XML

Share-Based Awards (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Stock Option Activity

The following table summarizes stock option activity for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Options Available for Grant			Number of Shares Subject to Existing Options			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		979,024			5,361,256		$	6.23		4.51	$	89,749,207
Authorized increase in plan shares		1,068,374			0			0
Granted		(1,884,079	)		1,884,079			30.01
Exercised		0			(1,624,304	)		4.59
Forfeited or cancelled		158,359			(158,359	)		21.42
Outstanding at December 31, 2012		321,678			5,462,672			14.48		4.88		78,912,364
Authorized increase in plan shares		1,387,064			0			0
Granted		(1,585,758	)		1,585,758			36.97
Exercised		0			(601,252	)		8.41
Forfeited or cancelled		68,831			(68,831	)		25.92
Outstanding at March 31, 2013		191,815			6,378,347			20.52		5.54		217,875,348
Vested and exercisable at March 31, 2013					2,133,492			8.50		3.73		98,502,329

Fair Value of Options Granted, Excluding Non Employee Director Awards, Estimated at Date of Grant Using Black Scholes Merton Option Pricing Model

The fair value of options granted, excluding Nonemployee Director Awards and certain options granted to the Company’s chief executive officer described below, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends and with the following assumptions for the periods presented:

	Three Months Ended March 31,
	2013			2012
Expected volatility		51	%		51	%
Expected dividend yields		0			0
Risk-free interest rate		0.70	%		0.76	%
Weighted-average expected life		4.58 years			4.58 years
Weighted-average fair value of options granted	$	16.28		$	12.91

Summary of Restricted Stock Award Activity

The following table summarizes restricted stock award activity for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Shares of Restricted  Stock			Weighted- Average  Grant- Date Fair Value
Unvested outstanding at January 1, 2012		75,000		$	29.69
Granted		299,213			30.43
Vested		(34,110	)		29.41
Forfeited or cancelled		0			0
Unvested outstanding at December 31, 2012		340,103			30.34
Granted		3,673			44.66
Vested		(9,923	)		35.23
Forfeited or cancelled		(1,270	)		27.75
Unvested outstanding at March 31, 2013		332,583			30.39

Summary of Restricted Stock Units Activity

The following table summarizes activity for restricted stock units for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Restricted  Stock Units			Weighted- Average  Grant- Date Fair Value
Unvested outstanding at January 1, 2012		0		$	0
Granted		300,961			38.77
Vested		0			0
Forfeited or cancelled		(4,957	)		39.69
Unvested outstanding at December 31, 2012		296,004			38.76
Granted		0			0
Vested		0			0
Forfeited or cancelled		(6,535	)		39.69
Unvested outstanding at March 31, 2013		289,469			38.74

Effects of Share Based Compensation in Statements of Operations

The following table presents the effects of share-based compensation in our statements of operations during the periods presented (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of revenue	$	163	$	85
Sales and marketing		1,227		190
Technology and development		1,034		310
General and administrative		1,722		833
Total	$	4,146	$	1,418

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Basis of Presentation

Basis of Presentation

The accompanying condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed financial statements should be read in conjunction with the audited financial statements and accompanying notes as of and for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on February 22, 2013. The condensed balance sheet as of December 31, 2012, included herein, was derived from the audited financial statements as of that date.

The unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2013, our results of operations for the three month periods ended March 31, 2013 and 2012, and our cash flows for the three months ended March 31, 2013 and 2012. The results of the three month period ended March 31, 2013 is not necessarily indicative of the results to be expected for the year ended December 31, 2013 or for any interim period or for any other future year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Estimates are used for revenue recognition, the allowance for doubtful accounts, website development costs, goodwill, recoverability of intangible assets with definite lives and other long-lived assets, and for share-based compensation. To the extent there are material differences between these estimates, judgments, or assumptions and actual results, our financial statements will be affected.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In February 2013, the Financial Accounting Standards Board (“FASB”) issued guidance on the reporting of amounts reclassified out of accumulated other comprehensive income. An entity must report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. This guidance is effective for interim and annual reporting periods beginning after December 15, 2012, with earlier adoption permitted, and must be applied prospectively. We adopted this guidance on January 1, 2013. The adoption of this guidance did not have any impact on our financial position, results of operations or cash flows as we do not have any items of other comprehensive income in any period presented.

XML

Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2013

Net Income (Loss) Per Share

Note 9. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares (including Class A common stock and Class B common stock) outstanding during the period. In the calculation of basic net income (loss) per share, undistributed earnings are allocated assuming all earnings during the period were distributed.

Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares (including Class A common stock and Class B common stock) outstanding during the period and potentially dilutive Class A common stock equivalents, except in cases where the effect of the Class A common stock equivalent would be antidilutive. Potential Class A common stock equivalents consist of Class A common stock issuable upon exercise of stock options and Class A common stock underlying unvested restricted stock and unvested restricted stock units using the treasury stock method.

For the periods presented, the following Class A common stock equivalents were included in the computation of diluted net income (loss) per share because they had a dilutive impact (in thousands):

	Three Months Ended March 31,
	2013		2012
Class A common stock issuable upon the exercise of stock options		0		2,580
Class A common stock underlying unvested restricted stock		0		66
Class A common stock underlying unvested restricted stock units		0		0
Total Class A common stock equivalents		0		2,646

For the three months ended March 31, 2013, 2,856,087 shares underlying stock options, 66,455 shares of Class A common stock underlying unvested shares of restricted stock, and 63,065 shares of Class A common stock underlying unvested restricted stock units have been excluded from the calculations of diluted net loss per share because their effects would have been antidilutive.

In the event of liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of all classes of common stock have equal rights to receive all the assets of the Company after the rights of the holders of outstanding preferred stock have been satisfied. We have not presented net income (loss) per share under the two-class method for our Class A common stock and Class B common stock because it would be the same for each class due to equal dividend and liquidation rights for each class.

XML

Shareholders' Equity

3 Months Ended

Mar. 31, 2013

Shareholders' Equity

Note 7. Shareholders’ Equity

Our board of directors has the authority to fix and determine and to amend the number of shares of any series of preferred stock that is wholly unissued or to be established and to fix and determine and to amend the designation, preferences, voting powers and limitations, and the relative, participating, optional or other rights, of any series of shares of preferred stock that is wholly unissued or to be established, subject in each case to certain approval rights of holders of our outstanding Class B common stock. There was no preferred stock issued and outstanding as of March 31, 2013 or December 31, 2012.

Our Class A common stock has no preferences or privileges and is not redeemable. Holders of Class A common stock are entitled to one vote for each share.

Our Class B common stock has no preferences or privileges and is not redeemable. At any time after the date of issuance, each share of Class B common stock, at the option of the holder, may be converted into one share of Class A common stock, or automatically converted upon the affirmative vote by or written consent of holders of a majority of the shares of the Class B common stock. During the three months ended March 31, 2013, 193,900 shares of Class B common stock were converted into Class A common stock at the option of the holders. During the year ended December 31, 2012, 2,065,787 shares of Class B common stock were converted into Class A common stock at the option of the holders. Holders of Class B common stock are entitled to 10 votes for each share.

In September 2012, we sold 3,844,818 shares of our Class A common stock, including 419,818 shares of our Class A common stock pursuant to the underwriters’ option to purchase additional shares, and certain shareholders sold 575,000 shares of our Class A common stock, at a price of $43.00 per share. We received net proceeds of $156.7 million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We received no proceeds from the sale of our Class A common stock by the selling shareholders.

XML

Share-Based Awards

3 Months Ended

Mar. 31, 2013

Share-Based Awards

Note 8. Share-Based Awards

On July 19, 2011, our 2011 Incentive Plan (the “2011 Plan”) became effective and was subsequently amended and restated effective as of June 1, 2012, to, among other things, increase the total number of authorized shares and include the material terms of performance goals for performance-based awards. The 2011 Plan is administered by the compensation committee of the board of directors. Under the terms of the 2011 Plan, the compensation committee of the board of directors may grant equity awards, including incentive stock options, nonqualified stock options, restricted stock or restricted stock units, to employees, officers, directors, consultants, agents, advisors and independent contractors. The compensation committee has also authorized certain senior executive officers to grant equity awards under the 2011 Plan, within limits prescribed by the compensation committee.

Stock Options

All stock options outstanding at March 31, 2013 are nonqualified stock options, with the exception of substituted incentive stock options for 15,143 shares of Zillow’s Class A common stock that were granted in connection with the December 14, 2012 acquisition of HotPads, Inc. Options under the 2011 Plan are granted with an exercise price per share not less than 100% of the fair market value of our Class A common stock on the date of grant, with the exception of substituted stock options granted in connection with acquisitions, and are exercisable at such times and under such conditions as determined by the compensation committee. Under the 2011 Plan, the maximum term of an option is ten years from the date of grant. Any portion of an option that is not vested and exercisable on the date of a participant’s termination of service expires on such date. Employees generally forfeit their rights to exercise vested options after 3 months following their termination of employment or 12 months in the event of termination by reason of death, disability or retirement. Options granted under the 2011 Plan are typically granted with seven-year terms and typically vest 25% after 12 months and ratably thereafter over the next 36 months, except for options granted under the Stock Option Grant Program for Nonemployee Directors (“Nonemployee Director Awards”), which are fully vested and exercisable on the date of grant, and except for certain options granted to the Company’s chief executive officer described below.

The following table summarizes stock option activity for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Options Available for Grant			Number of Shares Subject to Existing Options			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		979,024			5,361,256		$	6.23		4.51	$	89,749,207
Authorized increase in plan shares		1,068,374			0			0
Granted		(1,884,079	)		1,884,079			30.01
Exercised		0			(1,624,304	)		4.59
Forfeited or cancelled		158,359			(158,359	)		21.42
Outstanding at December 31, 2012		321,678			5,462,672			14.48		4.88		78,912,364
Authorized increase in plan shares		1,387,064			0			0
Granted		(1,585,758	)		1,585,758			36.97
Exercised		0			(601,252	)		8.41
Forfeited or cancelled		68,831			(68,831	)		25.92
Outstanding at March 31, 2013		191,815			6,378,347			20.52		5.54		217,875,348
Vested and exercisable at March 31, 2013					2,133,492			8.50		3.73		98,502,329

As of March 31, 2013, the numbers above do not include 144,270 shares of restricted stock and 289,469 restricted stock units granted pursuant to our 2011 Plan.

The fair value of options granted, excluding Nonemployee Director Awards and certain options granted to the Company’s chief executive officer described below, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends and with the following assumptions for the periods presented:

	Three Months Ended March 31,
	2013			2012
Expected volatility		51	%		51	%
Expected dividend yields		0			0
Risk-free interest rate		0.70	%		0.76	%
Weighted-average expected life		4.58 years			4.58 years
Weighted-average fair value of options granted	$	16.28		$	12.91

In the three months ended March 31, 2013, stock options for an aggregate of 30,690 shares of our Class A common stock were granted as Nonemployee Director Awards. The fair value of options granted for the Nonemployee Director Awards, $16.29 per share, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends, expected volatility of 51%, a risk-free interest rate of 0.36%, and a weighted-average expected life of 3.5 years. During the three months ended March 31, 2013, share-based compensation expense recognized in our statement of operations related to Nonemployee Director Awards was $0.5 million, and is included in general and administrative expenses.

In January 2013, an option for 500,000 shares of our Class A common stock was granted to the Company’s chief executive officer. One-eighth of the total number of shares subject to the option will vest and become exercisable on the three-year anniversary of the date of grant. An additional 1/96^th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable six years from the date of grant. One-eighth of the total number of shares subject to the option will vest and become exercisable on the four-year anniversary of the date of grant. An additional 1/96th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable seven years from the date of grant. The contractual life of the award is 10 years. The fair value of the option, $19.00 per share, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends, expected volatility of 51%, a risk-free interest rate of 0.70%, and a weighted-average expected life of 7.3 years. The option is subject to shareholder approval of a share increase under the 2011 Plan, and no portion of the option is exercisable until such shareholder approval has been obtained. However, for accounting purposes for determining the date of grant, shareholder approval is deemed to be a formality or perfunctory because the award has been approved by Zillow’s co-founders, who control enough votes to ensure shareholder approval of the share increase under the 2011 Plan.

In December 2012, an option for 500,000 shares of our Class A common stock was granted to the Company’s chief executive officer. One-eighth of the total number of shares subject to the option will vest and become exercisable on the one-year anniversary of the date of grant. An additional 1/96^th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable four years from the date of grant. One-eighth of the total number of shares subject to the option will vest and become exercisable on the two-year anniversary of the date of grant. An additional 1/96^th of the total number of shares subject to the option will vest and become exercisable monthly thereafter over the next three years so that this portion of the award will be vested and exercisable five years from the date of grant. The contractual life of the award is 7 years. The fair value of the option, $13.28 per share, is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, assuming no dividends, expected volatility of 49%, a risk-free interest rate of 0.60%, and a weighted-average expected life of 6.0 years. A portion of the option is subject to shareholder approval of a share increase under the 2011 Plan, and no portion of the option is exercisable until such shareholder approval has been obtained. However, for accounting purposes for determining the date of grant, shareholder approval is deemed to be a formality or perfunctory because the award has been approved by Zillow’s co-founders, who control enough votes to ensure shareholder approval of the share increase under the 2011 Plan.

Restricted Stock Awards

The following table summarizes restricted stock award activity for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Shares of Restricted  Stock			Weighted- Average  Grant- Date Fair Value
Unvested outstanding at January 1, 2012		75,000		$	29.69
Granted		299,213			30.43
Vested		(34,110	)		29.41
Forfeited or cancelled		0			0
Unvested outstanding at December 31, 2012		340,103			30.34
Granted		3,673			44.66
Vested		(9,923	)		35.23
Forfeited or cancelled		(1,270	)		27.75
Unvested outstanding at March 31, 2013		332,583			30.39

The fair value of the outstanding shares of restricted stock awards will be recorded as share-based compensation expense over the vesting period. As of March 31, 2013, there was $9.5 million of total unrecognized compensation cost related to restricted stock awards.

Restricted Stock Units

The following table summarizes activity for restricted stock units for the year ended December 31, 2012 and the three months ended March 31, 2013:

	Restricted  Stock Units			Weighted- Average  Grant- Date Fair Value
Unvested outstanding at January 1, 2012		0		$	0
Granted		300,961			38.77
Vested		0			0
Forfeited or cancelled		(4,957	)		39.69
Unvested outstanding at December 31, 2012		296,004			38.76
Granted		0			0
Vested		0			0
Forfeited or cancelled		(6,535	)		39.69
Unvested outstanding at March 31, 2013		289,469			38.74

The fair value of restricted stock units will be recorded as share-based compensation expense over the vesting period. As of March 31, 2013, there was $9.2 million of total unrecognized compensation cost related to restricted stock units.

Share-Based Compensation Expense

The following table presents the effects of share-based compensation in our statements of operations during the periods presented (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of revenue	$	163	$	85
Sales and marketing		1,227		190
Technology and development		1,034		310
General and administrative		1,722		833
Total	$	4,146	$	1,418

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies

Note 10. Commitments and Contingencies

Lease Commitments

We have various operating leases for office space and equipment. In March 2011, we entered into a lease effective through November 2022 for approximately 66,000 square feet of office space that has housed our principal offices in Seattle, Washington, since August 2011. In June 2012, we entered into a lease amendment for our corporate headquarters in Seattle, Washington, which increases the rentable area of the premises by 21,575 square feet. In April 2012, we entered into an operating lease in Irvine, California for 20,025 square feet under which we are obligated to make escalating monthly lease payments which began in August 2012 and continue through July 2022. In November 2012, we entered into an operating lease in San Francisco, California for 18,353 square feet under which we are obligated to make escalating monthly lease payments which began in December 2012 and continue through November 2018. We lease additional office space in San Francisco, California, Chicago, Illinois, Lincoln, Nebraska, and New York, New York. The operating lease for our prior headquarters in Seattle, Washington, which we vacated in August 2011, expired in February 2013.

Future minimum payments for all operating leases as of March 31, 2013 are as follows (in thousands):

Remainder of 2013	$	2,959
2014		4,101
2015		4,347
2016		4,834
2017		4,985
All future years		19,335
Total future minimum lease payments	$	40,561

Rent expense for the three months ended March 31, 2013 and 2012 was $1.1 million and $0.5 million, respectively.

Purchase Commitments

As of March 31, 2013, we had non-cancelable purchase commitments for content related to our mobile applications and websites totaling $15.8 million. The amounts due for this content as of March 31, 2013 are as follows (in thousands):

Remainder of 2013	$	3,062
2014		4,157
2015		4,291
2016		3,435
2017		818
All future years		0
Total future purchase commitments	$	15,763

Line of Credit and Letters of Credit

During March 2011, we entered into a loan and security agreement with a financial institution to establish a line of credit of $4.0 million. In April 2012, we amended our loan and security agreement to increase our line of credit from $4.0 million to $25.0 million. The line of credit is secured by substantially all our assets, including our intellectual property, and provides us with flexibility for future potential financing needs. The revolving line of credit contains customary financial covenants, including the maintenance of a minimum adjusted quick ratio (calculated as (i) unrestricted cash plus net accounts receivable divided by (ii) current liabilities less the sum of deferred revenue and any indebtedness owing from borrower to bank), measured on a monthly basis, of 1.50 to 1.00, and minimum Adjusted EBITDA, measured on a quarterly basis, of greater than or equal to negative $5 million for each quarterly period through December 31, 2012 and greater than or equal to $0 for each quarterly period thereafter. In addition, the revolving line of credit contains customary restrictions on our ability to, among other things, engage in certain mergers and acquisition transactions and create liens on assets. The revolving line of credit contains customary events of default that include, among others, non-payment of principal, interest or fees, violation of certain covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events and material judgments. The occurrence of an event of default will increase the applicable rate of interest by five percentage points and could result in the acceleration of Zillow’s obligations under the revolving line of credit. As of March 31, 2013, we were in compliance with all covenants, and there were no amounts outstanding under the line of credit. The line of credit is available through April 2016.

In March 2011, we executed a standby letter of credit of $1.5 million in connection with the lease of our Seattle offices, and in July 2012, we amended the standby letter of credit to increase the amount to approximately $1.7 million. In November 2012, we executed a letter of credit of approximately $0.2 million in connection with the lease of our San Francisco office. The letters of credit are secured by our investments and are effective until 60 days after the expiration date of the lease.

Legal Proceedings

There have been no material developments in legal proceedings during the three months ended March 31, 2013. For a description of previously reported legal proceedings, refer to Part I, Item 3 (Legal Proceedings) of our Annual Report on Form 10-K for the year ended December 31, 2012.

From time to time, we are involved in litigation and claims that arise in the ordinary course of business. Although we cannot be certain of the outcome of any litigation and claims, nor the amount of damages and exposure that we could incur, we currently believe that the final disposition of such matters will not have a material effect on our financial position, results of operations or cash flow. This forward-looking statement is based on management’s current understanding of the relevant law and facts, and it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of arbitrators, judges and juries. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

XML

Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Schedule Of Income Tax [Line Items]
Net operating loss carryforwards	$ 115.7

XML

Property and Equipment, net (Tables)

3 Months Ended

Mar. 31, 2013

Details of Property and Equipment

The following table presents the detail of property and equipment as of the dates presented (in thousands):

	March 31, 2013			December 31, 2012
Website development costs	$	36,836		$	33,448
Computer equipment		8,717			8,380
Leasehold improvements		1,659			831
Software		1,265			1,209
Construction-in-progress		3,603			3,093
Office equipment, furniture and fixtures		2,721			2,186
Property and equipment		54,801			49,147
Less: accumulated amortization and depreciation		(38,028	)		(35,513	)
Property and equipment, net	$	16,773		$	13,634

XML

Segment Information and Revenue (Tables)

3 Months Ended

Mar. 31, 2013

Revenue Categories

The chief executive officer reviews information about revenue categories, including marketplace revenue and display revenue. The following table presents our revenue categories during the periods presented (in thousands):

	Three Months Ended March 31,
	2013		2012
Marketplace revenue:
Real estate	$	26,109	$	14,185
Mortgages		4,909		2,408
Total Marketplace revenue		31,018		16,593
Display revenue		7,948		6,240
Total revenue	$	38,966	$	22,833

XML

Future Minimum Payments for Additional Space (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Subsequent Event [Line Items]
Remainder of 2013	$ 2,959
2014	4,101
2015	4,347
2016	4,834
2017	4,985
All future years	19,335
Total future minimum lease payments	40,561
Subsequent Events
Subsequent Event [Line Items]
Remainder of 2013	0
2014	909
2015	1,720
2016	1,765
2017	1,810
All future years	9,557
Total future minimum lease payments	$ 15,761

XML

Effects of Share Based Compensation in Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	$ 4,146	$ 1,418
Cost of Revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	163	85
Sales and Marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	1,227	190
Technology and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	1,034	310
General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation	$ 1,722	$ 833

XML

CONDENSED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Amortization of website development costs and intangible assets included in technology and development	$ 4,208	$ 2,004

XML

Property and Equipment, net

3 Months Ended

Mar. 31, 2013

Property and Equipment, net

Note 4. Property and Equipment, net

The following table presents the detail of property and equipment as of the dates presented (in thousands):

	March 31, 2013			December 31, 2012
Website development costs	$	36,836		$	33,448
Computer equipment		8,717			8,380
Leasehold improvements		1,659			831
Software		1,265			1,209
Construction-in-progress		3,603			3,093
Office equipment, furniture and fixtures		2,721			2,186
Property and equipment		54,801			49,147
Less: accumulated amortization and depreciation		(38,028	)		(35,513	)
Property and equipment, net	$	16,773		$	13,634

We recorded amortization and depreciation expense related to property and equipment (other than website development costs) of $0.6 million and $0.3 million, respectively, during the three months ended March 31, 2013 and 2012.

We capitalized $3.9 million and $2.3 million, respectively, in website development costs during the three months ended March 31, 2013 and 2012. Amortization expense for website development costs included in technology and development expenses was $2.5 million and $1.3 million, respectively, during the three months ended March 31, 2013 and 2012.

Construction-in-progress primarily consists of website development costs that are capitalizable, but for which the associated applications had not been placed in service.

XML

Subsequent Events (Tables)

3 Months Ended

Mar. 31, 2013

Future Minimum Payments for Additional Space

Future minimum payments for the additional space are as follows (in thousands):

Remainder of 2013	$	0
2014		909
2015		1,720
2016		1,765
2017		1,810
All future years		9,557
Total future minimum lease payments	$	15,761

XML

Fair Value of Options Granted, Excluding Non Employee Director Awards, Estimated at Date of Grant Using Black Scholes Merton Option Pricing Model (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	51.00%	51.00%
Expected dividend yields	0.00%	0.00%
Risk-free interest rate	0.70%	0.76%
Weighted-average expected life	4 years 6 months 29 days	4 years 6 months 29 days
Weighted-average fair value of options granted	$ 16.28	$ 12.91

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements of Assets on Recurring Basis

The following tables present the balances of assets measured at fair value on a recurring basis as of the dates presented (in thousands):

	March 31, 2013
	Total		Level 1		Level 2
Cash equivalents:
Money market funds	$	125,478	$	125,478	$	0
Short-term investments:
U.S government agency securities		33,083		33,083		0
Commercial paper		6,998		0		6,998
Corporate notes and bonds		7,021		0		7,021
Long-term investments:
U.S government agency securities		23,803		23,803		0
Corporate notes and bonds		1,278		0		1,278
Total	$	197,661	$	182,364	$	15,297

	December 31, 2012
	Total		Level 1		Level 2
Cash equivalents:
Money market funds	$	143,246	$	143,246	$	0
Short-term investments:
U.S government agency securities		26,085		26,085		0
Commercial paper		16,965		0		16,965
Corporate notes and bonds		1,004		0		1,004
Long-term investments:
U.S government agency securities		7,079		7,079		0
Corporate notes and bonds		2,310		0		2,310
Total	$	196,689	$	176,410	$	20,279