Investors grab Zillow shares

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Shares of Zillow, the online real estate data company, soared 79 per cent from its initial offering price yesterday, despite the struggles of the US property market.

Investors clearly valued the company as a technology stock rather than a real estate play. The market has been embracing Internet IPOs, evidenced by the success of recent offerings for LinkedIn, Pandora and HomeAway, a site specialising in second home rental listings.

Zillow has yet to report a profit and it controls only about 6 per cent of the online Internet listings business. But it offered only 3.5 million shares, about 13 per cent of the the available shares, helping to spur demand, analysts said.

The interest in Zillow is based more on its potential than its current revenue. The site attracted 22 million visitors in May by offering extensive information on homes and selling trends, in addition to listings.