No journalist can resist a good horse race. That’s why most stories about Trulia, the San Francisco-based real estate search company with 17 million users per month, also mention Seattle competitor Zillow (NASDAQ: Z).

After all, both companies were founded in 2005, and both offer fancy map-driven interfaces for canvassing rental listings and houses for sale. Trulia is a bit larger than Zillow (300 employees versus Zillow’s roughly 275). But Zillow beat Trulia to the public markets. It raised $69 million in its IPO last July, while Trulia continues, for the moment, to make do on the $33 million it has raised from venture investors like Accel Partners and Sequoia Capital.

But from my perspective, there isn’t much point in trying to pick a winner in the real-estate search business. The truth is that it’s big enough for both companies. The real prize in this market is an ongoing share of the dollars real estate agents spend on advertising. There are more than a million licensed real estate professionals in the U.S., who earn about $50 billion in commissions annually. Traditionally they’ve plowed about 10 to 20 percent of that income back into marketing and advertising. Do the math, and that’s a $5 to $10 billion industry.

Before companies like Zillow and Trulia came along, the vast majority of this spending went to offline channels: newspapers, classifieds, billboards, direct mail, grocery cart advertising, and the like. But both companies have built thriving businesses selling online ads and related services, with real estate agents now waiting in line to get their glamor shots and phone numbers on the sites’ listing pages.

What really interests me, then, is how quickly the real-estate startups have changed the way people buy homes—and the way agents sell them—even in the midst of the worst downturn in the housing market in generations.

I’ve had a couple of conversations on this theme recently with Pete Flint, Trulia’s co-founder and CEO, and it sounds to me as if both companies are using roughly the same playbook. It involves identifying the most common frustrations plaguing house buyers and real estate agents, and easing the pain by changing the way information gets delivered—whether that’s information about available homes, which was traditionally hard for consumers to find, or qualified leads on home buyers, which is what agents always want more of. “What we are trying to solve for is not only a consumer problem but an industry problem,” says Flint (he’s the one on the left in the photo above). “We not only needed to get smart on consumer needs, but also on how the real estate industry operates-the economics, the personnel, the legal aspects, all of those things.”

British-born Flint got a master’s degree in physics at Oxford and spent five years as a business development executive at UK-based travel site Lastminute.com before arriving at Stanford Business School in 2003. There he met a Finn named Sami Inkinen, who had also studied physics and had done his own spin in the startup and consulting worlds before deciding to pursue an MBA. “We became pretty fast friends,” says Flint. “We had a similar passion for high-tech, and we spent the first year at Stanford bouncing around entrepreneurial ideas.”

As second-year students in 2004-2005, Flint and Inkinen had spend time searching for off-campus housing in Silicon Valley, which is when “the light bulb went on,” Flint says. “At the time there were a handful of regional brokerage sites, but they were not really consumer destinations, and there were some very disappointing national sites, like Craigslist. It hit us that this was a big opportunity that seemed completely obvious, and it was remarkable that no one had done anything that was particularly strong.”

Before they even got their Stanford diplomas, Flint and Inkinen had founded Trulia and built a five-person office in San Mateo, CA. Flint took the CEO role and supervised product development, while Inkinen became president and hit the sales trail, selling realtors on the system. (Six years and about 200 employees later, the company moved to its current quarters in the historic Rialto Building in San Francisco; as one of the only big downtown office buildings that survived the 1906 earthquake and fire, it’s a real estate landmark in its own right.)

Inkinen and Flint figured that if they could bring lots of consumers to their site, they would be able to start siphoning real estate advertising dollars away from newspapers. But it was a chicken-and-egg problem. To attract consumers, Trulia needed actual real estate listings, but the … Next Page »

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The old waterfront warehouse that Immunex gutted and turned into Seattle’s biotech hotspot in the 1980s and 1990s is being transformed once again. This time, it’s being turned into a modern office building, with a whisky distillery on the ground floor.

The building at 51 University Street was acquired earlier this year by Sam Zell’s Equity Residential, and has been geared to attract a mix of new office and retail tenants, says Jeff Huntington, a vice president at Kidder Mathews who’s handling the office leasing. All the old equipment at 51 University has been cleared out, leaving the 13-foot ceilings and columns exposed, Huntington says. Floors two through six are still open for lease, although a whisky distillery recently inked a deal to occupy the first floor, Huntington says.

Immunex grew far beyond its roots at 51 University and eventually had space in 11 buildings in Seattle before it started consolidating at the Helix campus along Elliott Bay, now occupied by Amgen. But as I’m getting ready for our next event, The Immunex Impact, I’m reminded about how so many memories of biotech’s exciting early days are attached to this address.

The new 51 University St. isn’t being set up for biotech anymore, but rather is being geared for tech companies or other creative companies, Huntington says. The building, as Immunoids remember well, stands next to the Alaskan Way Viaduct. Quite a few of the offices have views that peek through the Viaduct to Elliott Bay, and some even look over the elevated freeway. But as the Viaduct is slated for demolition in 2016, those views of Elliott Bay will be a lot clearer.

“Some of the floors have very good views today,” Huntington says. “And some marginal views that will get phenomenally better in five years.”

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Online real estate company Zillow, which announced a small quarterly loss related to its recent headquarters move, is acquiring Diverse Solutions, a company that provides online marketing tools for real estate agents. The stock-and-cash transaction is worth $7.8 million, Zillow (NASDAQ: Z) said Wednesday.

Zillow said its net loss for the third quarter was $750,000, including a $1.7 million charge related to the company’s headquarters move. Without the charge, Zillow said it would have earned $1.1 million for the quarter, compared to a loss of $1.5 million a year ago. Revenues for the quarter were $19.1 million, more than double the figure from a year earlier, Zillow said.

This is Zillow’s second quarterly earnings report since it debuted on the public markets earlier this year.

The Diverse Solutions acquisition is an attempt to further beef up Zillow’s “marketplace” revenues, which have driven the company’s revenue growth in recent years.

That income category includes subscription fees for real estate agents and advertising sold to mortgage lenders, along with charges for lenders to participate in the company’s Mortgage Marketplace.

Third-quarter revenue growth illustrated that trend even further: The “marketplace” segment more than tripled year-over-year to $11.8 million, while display advertising revenue grew by 57 percent to $7.2 million, the company said.

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The past week in tech headlines was dominated by our leading alpha geek: Microsoft co-founder and chairman Bill Gates. Gates stopped by the University of Washington to give a short talk about the future of computing, and how he sees cheap, powerful storage and processing revolutionizing everything from robots to disease eradication (the part about malaria went on for kind of a long time).

But the most interesting part of the evening was surely the Q&A portion, in which Gates sat on stage with the UW’s Ed Lazowska to field questions on just about anything from students in the crowd. Gates seemed to rather enjoy the give-and-take, even when a young woman asked him how she could get rich.

As you’ve probably read by now, Gates marveled at how strange it was to be a billionaire, and said that once you get past a several million-dollar fortune, it’s really just more responsibility about how to give it away. “Once you get much beyond that—you know, I have to tell you, it’s the same hamburger,” Gates said to laughs. The UW now has the whole lecture up online.

Elsewhere around town:

—PopCap Games mobile chief Giordano Contestabile reminisced about the inglorious past of mobile gaming, when all games on cell phones were basically hokey ways to get people to send premium-priced text messages. As Contestabile said on Twitter, “When mobile games were crap.” Now it’s quite a different story, of course, and Contestabile is one of the people in the driver’s seat pushing the boundaries of how games will evolve.

He’s also joining us Dec. 6 for Mobile Madness Northwest, our half-day forum presented with the Washington Technology Industry Association at F5 Networks in Seattle. Early Bird pricing only lasts until Nov. 15, so get your tickets now.

—Online real-estate brokerage Redfin added $14.8 million in venture funding, with designs on expanding the business into new markets around the U.S.. The round was led by new investor Globespan Capital Partners.

—Speaking of venture deals, we looked at September’s fundraising for Washington-based companies in technology, biotech, and clean energy and found a total of $32 million had been raised, according to data from our partners at research firm CB Insights. Medical companies led the pack, with $12 million for RF Surgical Systems and $10.6 million for Theraclone Sciences.

—More turmoil at Clearwire (NASDAQ: CLWR), which saw board member Benjamin Wolff resign. Wolff is a close associate of Clearwire founder and former chairman Craig McCaw. The Kirkland-based wireless provider has been on a roller coaster ride lately—mostly down—as it and majority shareholder Sprint figure out how to navigate Clearwire’s expensive changeover to a new type of broadband technology.

—The state of Washington has been cutting millions from education budgets in the past several years as its treasury deals with low tax revenue. So there was one spot of good news for students shouldering larger tuition burdens: The rollout of open-source course materials for the most common community and technical college courses, called the Open Course Library. The project is jointly paid for by the state and the Bill & Melinda Gates Foundation.

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[Updated 12:20 pm Pacific with correction]
Redfin, the Seattle-based online real estate brokerage, says it has raised $14.8 million led by new investor Globespan Capital Partners. Redfin says the new round of financing, which pushes its total venture tally to about $46 million, will be used for R&D spending and expansion into new markets. At present, the company operates in about 20 individually listed markets, including Chicago, Dallas, L.A., and Long Island in New York.

Previous investors were back for the new round, including Seattle’s Madrona Venture Group and Vulcan Capital, Draper Fisher Jurvetson, and Greylock Partners. Globespan managing director Venky Ganesan is joining the Redfin board as part of the deal.

Redfin takes a different approach to the online real-estate market than Seattle’s Zillow (NASDAQ: Z). In Zillow’s case, it makes money from online advertising, professional subscriptions, and per-click fees charged to lenders who offer online mortgage quotes. Redfin is more like a traditional real-estate business model, making varying amounts of money on home sales, but offering discounts over typical commissions. Redfin has its own agents, but also partners with brokers around the country. Redfin says it also gets a cut of any lender fees generated by users it sends through Zillow’s Mortgage Marketplace. [This paragraph has been updated to correct references to the kind of fees charged in the Zillow Mortgage Marketplace.]

Although the housing meltdown was clearly a bad time for anyone involved in the real estate sector—and, basically, everyone else—Redfin appeared to have bounced back nicely as of last year, when CEO Glenn Kelman told TechCrunch that the company was on pace for a $30 million revenue year. Redfin had previously said it was profitable at a run rate about half that size.

Zillow, of course, went public earlier this year—the only Seattle-area tech company to pull off an IPO while the window was seen as open. GeekWire’s John Cook says Redfin has been discussed as a possible IPO candidate, but that’s apparently not immediately in the cards.

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Marina Biotech, the developer of RNA interference drugs, has been running low on cash for a while, and now it has found a way to send less cash every month to its landlord.

The Bothell, WA-based biotech company (NASDAQ: MRNA) said today in a regulatory filing that it has terminated the lease on its lab and office building at 3450 Monte Villa Parkway in Bothell, and that it has 30 days to clear out, according to a regulatory filing. The company got out of its lease by agreeing to pay entities affiliated with its landlord, BioMed Realty Trust, 7.8 million newly issued shares of its stock at a settlement price of 23 cents a share. The building was previously the home of small-scale manufacturing for nasal spray formulations of drugs, back when the company concentrated on those compounds and was called Nastech Pharmaceutical.

Marina, which now works on RNA-based drugs that seek to specifically shut down certain disease-related genes, will remain in its corporate headquarters down the street at 3830 Monte Villa Parkway, CEO Michael French said. At one point in late 2007, Nastech had about 230 people spread between the two buildings on Monte Villa Parkway. But the 3450 building has been empty for more than three years since Marina shifted its focus away from the nasal spray drug business.

“We’ve finally been able to jettison that ‘legacy’ building,” French said in an e-mail.

Marina has had numerous cash crunches before, but getting rid of that extra building will help Marina buy at least a little more time during a bleak period for RNA interference companies, as major pharma companies like Merck and Roche have backed away from some of their bold RNAi initiatives. Marina had just $5.9 million in cash left at the end of June, in its most recent quarterly report. In the same quarter, the company had a net loss of $3.6 million. Early in September, Marina said its chief financial officer and chief scientific officer were both stepping down as part of a broader reshuffling of management responsibilities. The company’s slim cash position prompted Marina’s auditor to issue a formal opinion raising doubts about the company’s ability to continue as a “going concern.”

Shares of Marina closed at 16 cents today, giving it a market value of about $12.7 million.

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First of all, please don’t call CustomMade a “mass customization” startup. That phrase refers to the cluster of companies, many of them in the Boston area, that specialize in offering consumers personalized goods online—everything from clothing to jewelry to artwork.

No, CustomMade is different. At least that’s what co-founder and CEO Mike Salguero would have you believe. The Cambridge, MA-based startup runs a website that connects consumers with expert makers of furniture, ceramics, home décor, glassworks, and more. That’s different from sites that let consumers configure products or browse through umpteen permutations of features before ordering them.

“Where we play is the service, not the product,” says Salguero. “There’s no configurator. This is custom on a whole different level.” (As an aside, “The Configurator” sounds like either a great nickname or the next Jason Statham movie.)

Salguero and fellow co-founder Seth Rosen were building their careers in real estate development when they bought CustomMade.com for $140,000 in early 2009. The site had already existed for years as a custom woodworking site and was getting modest traffic, about 500,000 unique visitors a year. Salguero and Rosen raised about $2 million from friends and individual investors, rebuilt the user interface, and have grown the site’s traffic to more than 3 million uniques a year. The company currently uses a subscription model; its 2,500 makers and craftspeople pay an annual or monthly fee, says Salguero.

The company has just raised an additional $2 million from unnamed investors. The new money is being used to continue its growth, Salguero says. But the startup isn’t saying anything more specific about that yet.

Nevertheless, here are a few more reasons why CustomMade is interesting (and about to get more interesting):

—The company is moving to a transaction-based model (it will still make money on subscriptions as well) in which it will take a cut of each purchase made through the site. And just for reference: Etsy, a prominent online marketplace for handmade goods, has an average transaction value of about $25, Salguero says. CustomMade’s average is $2,000.

—As part of the shift, the company will roll out a new interface for consumers and craftspeople to interact. More on that coming down the pike.

—CustomMade has been hiring, and is now up to 22 employees. The firm recently recruited Michele Pearl, a well-known exec from BzzAgent and Monster.com, as its chief product officer.

—Locally-made and handcrafted goods are a multibillion-dollar market that can conceivably compete on price and selection with medium-to-high-end retailers. The question, of course, is how much of that market can be captured if the process is made simple and efficient.

—Perhaps more than mass customization, CustomMade fits into the trend of online communities that connect experts with paying customers who want specific jobs done, through a social interface. See GrabCAD, Kickstarter, IndieGoGo, and Quirky, for instance.

Stay tuned for more on this company…

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Yesterday I had a chance to catch up with Jason Wong, the CEO of San Francisco-based Rereply and i5labs, who’s been a longtime tenant at the Pier 38 startup hub and has been closely involved in efforts over the past two weeks to stave off the facility’s impending closure. Wong attended a meeting last Friday between Pier 38 tenants, city officials including Mayor Ed Lee, and officials from the Port of San Francisco, which manages the pier. He says there’s bad news and good news.

The bad news is that Port officials didn’t waver from their position that conditions at the pier are unsafe and that all tenants must move out by September 30, as previously ordered. In fact, Wong says Port officials escalated their rhetoric, calling Pier 38 a “death trap” where conditions for tenants are “life-threatening.”

The good news is that Port officials agreed, under pressure from the mayor’s office, to expedite the necessary repairs to the pier, so that the space can eventually be reopened and startups invited back in. Officials offered no timeline for the repairs, but seemed to agree that Pier 38 shouldn’t merely be fenced off and allowed to decay, as the neighboring Pier 36 has.

“What we might have gotten out of this, maybe, is an acceleration of the timeline, or at least [Port officials] expressing an interest in working with us to preserve it as a technology hub,” says Wong. “As opposed to where they were before, which was basically, ‘Okay, let’s get this place inspected and repaired at our own pace of two to four years.”

Mayor Lee and officials from the San Francisco Fire Department and the Department of Building Inspection visited Pier 38 before the meeting with Port officials on Friday for a walk-through of the building and a look at the safety problems identified during the Port’s own inspections in August. Wong says the city officials apparently found no room for disagreement with the earlier inspection report (which Xconomy has reproduced here).

The executive director of the Port, Monique Moyer, told the San Francisco Business Times earlier this month that the agency moved to evict the scores of tech companies at Pier 38 without slowing down to notify the mayor’s office because of concerns about fire risk. Wong says Port officials made it clear at Friday’s meeting that those concerns haven’t abated. “They used extreme wording, and said that the state of the pier was actually life-threatening,” he says. “Being that we’ve been there for six years, its hard for us to imagine that it’s actually that bad, but liability is liability.”

With the total evacuation of Pier 38 by September 30 now a certainty, startup founders are scrambling to find temporary or permanent homes elsewhere—and wondering what form a reconstituted startup community might take at the pier. Even if renovations were to proceed quickly, it’s likely that many of the companies and organizations losing their homes, such as Polaris Venture Partners’ Dogpatch Labs operation, will be forced to sign long-term leases elsewhere, making it difficult or impossible for them to move back.

But with the startup scene still booming in San Francisco, Wong predicts that there will always be a fresh crop of companies ready to fill up the space, which has proved so enchanting to employees of previous startup tenants like Appjet, Automattic, Instagram, Formspring, LOLapps, 99designs, Recurly, TaskRabbbit, and Yardsellr. “With the reputation that Pier 38 has, I am 100 percent sure that somebody will step up,” Wong says.

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San Francisco Mayor Ed Lee is expected to visit Pier 38 today at noon to meet with tenants at the bustling but endangered tech hub. Immediately after the mayor’s tour, tenants and city officials will proceed to the Port’s offices on Pier 1 to discuss the impending shutdown of the pier. The city’s Office of Economic and Workforce Development stepped in to organize the meeting after Pier 38 tenants staged a protest rally at City Hall earlier this week.

It’s unclear whether there’s any prospect of a change in the Port’s plan to eject all tenants from the bayside facility by September 30. Port officials notified Pier 38 tenants earlier this month that they’d have to clear out, after engineering inspections in August uncovered numerous safety problems at the pier. The inspection report, obtained from the Port’s website, is embedded in full below.

I spoke yesterday with Gus Weber, a Polaris Venture Partners entrepreneur-in-residence who oversees Polaris’s Dogpatch Labs incubator at Pier 38. Weber said he’s busy scouting new locations for Dogpatch and that he isn’t counting on today’s meeting to lead to a stay of execution for the startup community at the pier. More likely, Weber said, Port officials will simply reiterate their inspection findings.

An official e-mail inviting tenants to the meeting said the goal is to “discuss the conditions of Pier 38, answer businesses’ questions and discuss how the City can assist with finding alternate locations.”

Dogpatch companies—who represent only a minority of the dozens of tech startups working from the pier—are likely to be homeless for at least a month while Polaris locates new space, Weber said. And even if Pier 38 were to reopen for business after the required repairs, it’s unlikely Dogpatch would move back, Weber said.

There’s a petition to save the pier online here at Change.org, with 318 signatures so far.

Here’s the inspection report filed by Creegan & D’Angelo, the engineering firm hired by the Port of San Francisco to inspect the pier.
C D Pier 38 Condition Survey With Recommended Actions Final Report

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In a blog post today, Ryan Spoon of Polaris Ventures shared some pretty awful news for the tech startup community in San Francisco. The vibrant collection of startups and related tech firms occupying Pier 38 will have to clear out of the funky but aging structure by the end of September, thanks to a condemnation order from the Port of San Francisco. The port owns the property and was leasing it to a developer, who in turn sublet much of the space to Socialmedia, Spoon’s Dogpatch Labs, True Ventures, Automattic, and other companies.

I’d been hearing stories about Pier 38′s “crazy landlord” for months. And when I attended a conference at Automattic’s first-floor lounge at Pier 38 on August 27, I noticed red stickers on the windows stating that the property was unsafe to enter or occupy (blogger Robert Scoble posted pictures of the notices). But since absolutely no one was paying attention to them, I assumed the stickers must be simply the latest volley in what has become a long-running saga pitting Pier 38 tenants against their landlord, Carl Ernst Jr., and now against their landlord’s landlord, the port itself.

According to this SF Weekly article back in 2002, The Port of San Francisco granted a 36-year lease on the pier to Ernst, a waterfront developer, in 1996. Ernst said he wanted to turn the pier into a high-end marina and restaurant complex, and promised he’d build a public promenade around the pier.

None of that ever came to pass. Instead, Ernst began subleasing space in the pier, with True Ventures and advertising startup Socialmedia being among the first tech-related companies to take up residence. In 2008 Polaris Ventures sub-sublet a part of Socialmedia’s second-floor area that same year for Dogpatch Labs, its informal startup incubator and coworking space, where 10 to 20 startups are in residence at any given time. (Xconomy’s Bob Buderi visited the space and profiled Dogpatch back in early 2009.)

Automattic, maker of the WordPress blogging platform, fixed up the space across the pier’s iconic archway from True Ventures as a flexible coworking lounge for its itinerant employees. True Ventures and other organizations often used the Automattic space for startup events such as the August 27-28 conference on behavioral economics that I attended.

Ernst’s venture eventually ended up in bankruptcy court, and in February the Port of San Francisco sued to evict him and hit him with citations for a series of code violations. According to the San Francisco Business Times, city officials originally said they just wanted to get Ernst out of the picture, and that they hoped to keep the tech scene inside Pier 38 alive. But apparently, the dispute escalated past that point. In a bizarre twist in the story this May, police arrested Ernst after he allegedly threatened to kill the port’s directors and other staffers. He was later released on bond, but the port obtained a protective order barring Ernst from the pier, according to the San Francisco Chronicle.

Spoon, a Polaris Ventures principal who manages Dogpatch, told TechCrunch that Polaris is “actively working on finding a great new Dogpatch Labs home.” Spoon says the operation has been home to 250 entrepreneurs from more than 100 companies in the past two and a half years, including Appjet, Instragram, Formspring, LOLapps, Recurly, TaskRabbbit, and Yardsellr.

GigaOm founder Om Malik, who is also a venture partner at True Ventures, wrote in his personal blog tonight that he has mixed emotions about the pier’s closing. He says it was “drafty and cold” with Psycho-like bathrooms, but also a “lovely peaceful” place to work. “A whole lot of startups can trace their roots back to this creaking, aging pier,” Malik writes. “It became a vibrant little village. We moved away to somewhere else, but Pier does live in our heart.” Malik also speculates that the ultimate reason behind the pier’s closing is not the dispute with Ernst, but the Port’s larger effort to redevelop the Embarcadero area in time for the America’s Cup sailing finals in 2013.

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Rand Fishkin, the CEO of Seattle search-marketing software company SEOmoz, is known for his extensive blog posts that lift the curtain on running a startup company. But the amount of transparency he showed recently wowed even longtime observers, as Fishkin laid out an extremely open tale of a possible new round of venture capital. We rounded up the whole thing with this interview and Storify timeline, and wrapped it up yesterday, after Fishkin disclosed that the deal had fallen apart under somewhat odd circumstances.

Steve Jobs‘ abrupt resignation as CEO of Apple led to a long round of remembrances and anecdotes, a remarkable outpouring rarely seen for a corporate executive. I stumbled upon one tale of a close encounter with the man himself via Twitter, where Seattle PR executive Kevin Pedraja mentioned the time Jobs responded to Pedraja’s irate customer message with a weekend phone call. It’s a tale previously told, but worth revisiting.

Zillow (NASDAQ: Z) reported its first quarterly earnings as a public company, showing an honest-to-goodness profit for the first time. It wasn’t a huge profit—$1.6 million in earnings, on $15.8 million in revenue. But growth was strong, and the profit was a big positive. CEO Spencer Rascoff also went into detail with analysts, including Zillow’s prediction that the national housing market won’t reach bottom until next year.

We rounded up the equity deals for Washington-based companies from July, and no surprise here: the $37 million round for traffic-data company Inrix easily led the way, accounting for more than a third of the venture money raised last month in the state. Varolii, Lucid Commerce, PayScale, and Yapta rounded out the top five.

Xconomy’s Wade Roush took us on a tour through the sea of photo-storage services on the Web, wondering why Flickr has given up so much ground as others have tried to push the boundaries: Google+, Apple’s iCloud, and a startup called Snapjoy. What about Facebook, which has the lion’s share of our online photos? “Facebook doesn’t actually care about photos. It only cares about the people who appear in them,” Wade writes, pointing out that tools for processing and displaying the images are secondary to tagging and sharing functions.

Finally, a bit of personnel news: Maveron, the consumer-focused VC firm co-founded by Starbucks CEO Howard Schultz, has promoted former Zynga executive Andrew Trader to partner. Trader had been an entrepreneur in residence at the firm, which has offices in San Francisco and Seattle, since last fall.

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[Updated at 4 pm Pacific] Real-estate website operator Zillow (NASDAQ: Z), which went public in late July, reached profitability in the second quarter on revenues of $15.8 million, more than double the sales of a year earlier. The Seattle company’s net income for the quarter was $1.6 million. A year earlier, it had lost $2 million.

As has been the case for the past few years, revenue growth was driven by ”marketplace” revenues, which include subscription fees for real estate agents and advertising sold to mortgage lenders, along with charges for lenders to participate in the company’s Mortgage Marketplace.

That revenue stream reached $9.7 million in the second quarter, up from $2.6 million a year earlier. Display advertising, meanwhile, still grew—but nowhere near as rapidly, reaching $6.1 million for the quarter, up from $4.7 million in the same period during 2010.

Zillow said average monthly unique visitors to its website nearly doubled for the quarter, to 20.8 million. All the publicity around the company’s IPO certainly helped drive eyeballs.

[Update] Here are some key takeaways from the conference call with analysts:

—Zillow is going to spend some money this year to beef up technology, ramp up sales, and grow the staff. The company cleared nearly $80 million from the July IPO after underwriting fees, and had $16.2 million in cash on its balance sheet and no debt at the end of the second quarter on June 30. Now at around 265 employees, Zillow is moving to a new headquarters this month and is hiring for about 40 positions.

—Zillow didn’t break out a net-income guidance figure for the third quarter and rest of this year, but gave an outlook for overall revenues and its adjusted EBITDA earnings. The company expects $16-$17 million in revenues in the third quarter, with non-GAAP earnings of around $8 million. For the year, Zillow is looking at revenues of between $59-$61 million, with non-GAAP earnings in the range of $8-$10 million. Both of those revenue figures would be around double the performance from a year earlier.

—Agents signed up for Zillow’s Premier Agent program are spending more on their accounts, helping overall revenue from that segment grow faster than the pace of new agents signing up. CEO Spencer Rascoff said that means overall “marketplace” revenues are a better measurement, cautioning analysts not to lean too heavily on the number of new agents as a performance indicator. The agent program is the biggest slice of those marketplace revenues, which also include sales from its relatively new mortgage-shopping site.

—There are about 13,400 agents signed up to the premier program, a fraction of the 1 million nationwide that Zillow estimates are active in the real estate business. Zillow also estimates that the nation’s real estate agents spend about $6 billion annually on marketing, leaving a huge source of revenue to attack. “We have less than a 1 percent share of their advertising budgets right now,” Rascoff said. “We think we’re dramatically under-penetrated, relative to our traffic and our importance in the industry.”

—There’s been some improvement in the sluggish housing market following the historic collapse of a few years ago, and it’s not ready to rebound just yet, according to Zillow’s data. While some markets, such as Washington, D.C. and Pittsburgh have improved, “Zillow’s data says that we haven’t bottomed yet, and we don’t think we’re going to bottom until 2012,” Rascoff said.

“We’re certainly closer to the end of the housing recession than the beginning, but we’re not through it yet. However … we’ve managed to grow quite nicely through this recession,” he said. “I think, actually, the housing downturn has accelerated the migration of advertising budgets for real estate advertisers from offline to online, and Zillow’s clearly been a beneficiary of that acceleration.”

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Zillow’s stock ended a roller coaster ride of trading on Wednesday, its first day as a public company. The Seattle-based online real estate listing company’s stock traded as low as $32.50 and as high as $60, but ultimately posted a 79 percent gain, finishing the day at $35.77. Zillow (NASDAQ: Z), by pricing its shares at $20 yesterday for certain institutional investors, ended up raising about $75 million in cash proceeds from the IPO and a private placement with previous investors.

Zillow’s IPO ends a roughly yearlong drought for Seattle-area tech companies going public—the last was Bellevue-based Motricity (NASDAQ: MOTR), which had to cut its price and share offering before selling shares. And even that wasn’t a totally home-grown affair, as Motricity arrived in the region from North Carolina after purchasing a piece of InfoSpace.

And Zillow likely won’t be the last, with RFID maker Impinj already filing an investor prospectus with the SEC to go public. PopCap Games also was talking about an IPO earlier this year, but wound up being gobbled by Electronic Arts to help the large game-maker continue its digital games expansion.

It’ll be interesting to see how Zillow’s IPO affects the local tech entrepreneurship scene. With an infusion of capital, the company has the ability to work with smaller startups that could partner with or even be acquired by the larger publicly traded company—a key to building the local startup scene that we recently covered with Ignition Partners’ Frank Artale. The IPO also delivers some wealth, at least on paper, to the founders and employees, possibly increasing the ranks of angel investors around the area.

Nationally, Zillow is being seen as a measure of the appetite for mid-range tech companies. Zillow is not profitable yet, but is narrowing its losses, from about $12.9 million in 2009 to about $6.8 million in 2010. Revenue almost doubled last year, to about $30.5 million.

Of course, that’s nothing like the roughly $250 million in revenue for recent consumer web IPO LinkedIn, or the  $600 million in revenue posted by social game powerhouse Zynga, which is preparing for an IPO. But as we discussed previously, there’s something to be said for a real-estate focused company like Zillow being able to even reach the IPO threshold after the historic housing meltdown this country has been through the past three years.

In a blog post, CEO Spencer Rascoff said the company is “still in the very early days at Zillow in our quest to give people an edge in real estate. We view today’s milestone as, quite simply, a stepping stone towards greater things to come for our users, our partners, and our team.”

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Biogen Idec (NASDAQ: BIIB) has confirmed what the biotech community has been buzzing about for a couple months—it is moving its headquarters back to Cambridge, MA. The company is now planning to build two new buildings in Cambridge to house 530 employees who will move from the current headquarters in Weston, MA, according to a report today in the Boston Globe.

CEO George Scangos told the newspaper that the move is being made to put the company’s entire Massachusetts workforce—about 2,000 people—in Kendall Square. Biogen plans to sublease the Weston facility once it has moved employees into the new buildings in Cambridge, Scangos said in the account. One of the new buildings, at 17 Cambridge Center, will have 190,000 square feet; the other, on Binney Street, will have 305,000 square feet, the Globe reported.

“We want to be the very best at what we do,” Scangos told the Globe. “We have a lot on our plate, and execution will be absolutely critical. Being geographically separated, there’s a barrier.”

Speculation has been thriving over such a move since May, when Scangos made remarks in a Reuters interview about how he didn’t like being separated from the company’s R&D operations in Cambridge. In an interview with Xconomy last month, Scangos said the company was working on ways to bring the commercial side and the R&D sides of the company back together in Cambridge.

The decision to move the headquarters to Weston was made by former Biogen CEO James Mullen, before Scangos took over a year ago.

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Seattle online real-estate listing company Zillow says it will begin trading on the NASDAQ stock exchange Wednesday at $20, a price higher than its recently revised estimate of $16-$18 per share. That price could value the company at about $540 million. Zillow is selling nearly 3.5 million shares, seeking about $70 million.

Nationally, the Zillow (NASDAQ: Z) IPO is being watched as an indicator of whether smaller, unprofitable tech companies will be able to head to the public markets while the IPO window is open. Zillow has attracted nearly $90 million in financing over its lifespan.

As the first Seattle-area technology company to hit the public markets in about a year, Zillow also is carrying a lot of water to represent the Pacfic Northwest’s innovation community. If the stock underwhelms, the default line of commentary about Seattle’s tech scene will include references to a poor showing for quite some time. If it does well, the region could glean some positive publicity—not to mention some new money that entrepreneurs will hope finds its way back into the startup scene.

Zillow is a bit of an odd character in the current IPO game. It’s not a hot social networking or gaming company, instead harkening back to its mid-decade founding as an early Web 2.0 offering. While its initial intent was to bust through the sometimes opaque real estate pricing systems, Zillow has settled into a less revolutionary, but still useful site for real estate properties, agents, mortgages, and rentals.

The company isn’t profitable, although losses have been narrowing from about $12.9 million in 2009 to about $6.8 million in 2010. Zillow’s revenue doubled last year to about $30.5 million, but that’s not a blockbuster figure these days. Revenue growth in the past few years has been largely driven by growth in Zillow’s “marketplace” revenues, which include subscription fees for real estate agents and advertising sold to mortgage lenders, along with charges for lenders to participate in the company’s Mortgage Marketplace.

Another thing that could put off investors is the tight control that co-founders Rich Barton and Lloyd Frink will have over the company. The two are the sole holders of Zillow’s Class B stock, which has 10-to-1 voting rights over the regular Class A shares. Those positions, along with their Class A holdings, mean that Barton and Frink will collectively hold the keys to any major decisions—not the other shareholders.

Three investment groups have the most to gain through a Zillow IPO. TCV Funds holds almost 30 percent of Class A common stock, followed by Benchmark Capital, with 19 percent, and Par Investment Partners, with about 11 percent ownership

The underwriters are Citi, Allen & Company, Needham & Company, ThinkEquity, and First Washington. They’ll have an option on nearly 520,000 additional shares to cover any over-allotments. Zillow also is selling about 275,000 shares to existing investors in a concurrent private placement.

Zillow had a pretty big year in 2010. In July, the company partnered with Yahoo Real Estate, creating the largest real estate advertising network in the industry. It inked another partnership in the fall, this one with Chicago-based Apartments.com to create a more comprehensive national database of apartment listings.

Spencer Rascoff was promoted to chief executive last fall, taking over for Barton. At that time, Rascoff said the Zillow Mortgage Marketplace was its fastest-growing business. That feature lets consumers anonymously shop for mortgage rates in different markets around the country. Zillow also recently extended its brand of pricing estimates-or “Zestimates”-to apartment listings.

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David Vivero, the co-founder and CEO of San Francisco-based RentJuice, was raised in the real estate business. His family owns and manages several apartment buildings in Miami Beach. He grew up fixing air conditioners, traipsing up and down the stairs collecting rent checks, and negotiating with tenants over security deposits. Even after he went off to Harvard College to study economics, he’d spend every school vacation back in Miami, helping with the family properties.

So when Vivero says landlords and rental brokers are in pain, he knows whereof he speaks. The problem, he says, is that the convenience brought to the consumer side of the market by Web services like Craigslist, Zillow, and Trulia never filtered back to rental offices.In some ways, the new demand for up-to-date online listings has actually made owners’ and brokers’ lives harder.

It’s not that brokers don’t have computerized databases of apartment listings—they do. They’re just not integrated with anything else. Vivero paints a picture of the process that sounds as if it were coming straight out of 1992. “It would start with a property owner trying to understand what units might be vacant on September 1,” says Vivero. “They produce a document. They transmit those listings to apartment-finder services and brokerages. Each broker gets stacks of these and processes them into their database. By the time they finish that, a new one has already been sent, so they’re always playing catch-up. They’re spending hundreds of thousands of dollars a year just on data entry. The whole supply chain suffers. And the reason there is a lot of unreliable information on Craigslist is because even the most genuine broker trying to market a listing may not have the latest info.”

David Vivero

Even before he’d finished his MBA at Harvard Business School, Vivero had decided that what the real estate world needed was a single online platform where landlords and brokers would be able to manage the entire rental process, from a vacancy to a signed lease. “I walked up and down Newbury Street and Commonwealth Avenue and Brighton Avenue [the main loci for rental offices in Boston] and spent time in the offices of brokerages and real estate management companies and listened to their issues,” Vivero says. “I didn’t have a computer science background, so I taught myself Python and started programming.”

The result was RentJuice, which opened its doors in San Francisco in 2010 and collected $6.3 million in Series A financing this spring from Lexington, MA-based Highland Capital, Boston, MA-based NextView Ventures, and a group of high-profile individual investors, including Tim Draper, the co-founder of venture firm Draper Fisher Jurvetson. In March, RentJuice acquired its main competitor—Boston-based Kahoots—and its only real rival now is yougotlistings, a much smaller startup, also based in Boston, that emerged from the Y Combinator venture incubator this spring.

Vivero describes RentJuice as a “virtual rental office” that landlords and brokers can access at any time from any Web browser. It includes a whole lot of features. There’s a database for storing and searching apartment listings; interfaces for publishing these listings on the broker’s own website or Facebook page; an ad-builder that automatically sends listings to 35 outside rental sites such as Craigslist, Rentbits, and Rent Jungle; and a “lead management” area for responding to inquiries from potential renters and scheduling apartment showings. There’s even a tool that and spawns instant background checks and credit reports on rental applicants and generates ready-to-sign lease paperwork.

The system, Vivero says, eases the three biggest pain points for any rental broker: tracking apartment availability and pricing, maintaining listings across dozens of websites, and playing both lawyer and banker during the application process. But he hastens to add that … Next Page »

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Online real-estate company Zillow has updated its SEC papers for a planned IPO, saying it expects shares to have an initial price of between $12 and $14. That could bring the company about $55.7 million and put its value close to $380 million, not including options for underwriters to cover over-allotments. The top end of the price range values Zillow at more than 10 times its nearly $30.5 million in revenues for 2010, although 2011 first-quarter revenues more than doubled to about $11 million compared with a year earlier.

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Cambridge, MA-based Brightcove, the digital media and video hosting firm, said today it is planning to move from One Cambridge Center to Atlantic Wharf on the Boston waterfront in April 2012. The company, which was founded in 2004, has signed a 10-year lease for an 82,000-square-foot office space at 290 Congress Street. Brightcove has 280 employees and plans to hire 120 more to fill out the new space, according to a report in the Boston Globe. The firm, perhaps best known for its video-hosting Web platform, has focused more on mobile video in the past year or two. Brightcove joins Vertex Pharmaceuticals, Heartland Robotics, and other companies that recently have moved, or are in the process of moving, from Cambridge to Boston.

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Biogen Idec, after weeks of speculation in the local real estate market, has confirmed it is considering options to move its headquarters back from the suburbs to Cambridge, MA, as CEO George Scangos seeks to foster a more close-knit culture between the company’s R&D and commercial operations.

“We’re working on it. We’ll see if it’s practical,” Scangos says. “We don’t have anything signed. We are exploring a number of options.”

Scangos’ latest remarks came on Tuesday during an interview with Xconomy at a temporary office being set up for top Biogen executives in Cambridge’s Kendall Square. While Scangos says he is still spending most of his time at the company’s new headquarters in Weston, MA, he has personally carved out the new temporary office (with fresh pastel paint on the walls you can still smell) on the second floor of 10 Cambridge Center, closer to the center of R&D and biotech drug production.

No new letter of intent or lease has been signed in Cambridge, Scangos says, but he elaborated on some of the issues he’s been considering in regard to a potential move to Cambridge.

“There are some practicalities to consider,” Scangos says. “We have a long-term lease [in Weston]. If we were to move everybody back here, we’d need a lot more space. We’d have to be able to get that at a price that’s reasonable, and we’d have to deal with a sublease.”

Scangos’ latest comments build on remarks he made last month in an interview with Reuters, and at the Convergence conference, which prompted speculation about a potential move of the sales, marketing, and administrative offices back to Cambridge. In those comments, Scangos said he didn’t like having executive offices that are separate from the company’s R&D facilities in Cambridge. The suburban facility lacks energy, and is isolated from the company’s labs, he said.

The decision to move Biogen’s headquarters to Weston was made in the fall of 2008, under previous CEO James Mullen. Scangos took over last summer. “It wouldn’t have been my choice. In an ideal world, we’d all be back in Cambridge,” Scangos said at Convergence on May 20. “But we don’t live in an ideal world. We’re looking into it [a move], but I don’t know if it’s realistic or not.”

In the Tuesday interview with Xconomy, Scangos repeated some of the reasons he wants to bring the R&D and commercial group back together in one place.

George Scangos in his temp office at 10 Cambridge Center

“What I don’t like is the split where we have sales and marketing sitting in Weston and R&D sitting here,” Scangos says. “Today, I’m the only member of senior management who’s here. Everyone else is in Weston. That’s not optimal. If we could get everybody together, I would very much like that. It’s more sensible to have everyone in one location. You can talk, go down the hall, have lunch together, just meet people randomly, and get really good discussions going between departments of R&D and commercial.”

The practicalities which Biogen will have to iron out to do that aren’t trivial. Back in the fall of 2008, the company signed a 15-year lease on a 356,000-square foot office building in Weston; it started moving into the new space during mid-2010. Shortly after signing the new lease, Biogen explained in its annual report to shareholders that “we anticipate that the Weston facility will decrease our overall occupancy cost per employee.” About 500 people had their offices moved from Cambridge to the 74-acre Weston site just a year ago. Biogen has about 4,400 employees worldwide.

Biogen will still have facilities in multiple locations around Massachusetts, and the world, even if the company executes on the idea of moving its headquarters back to Cambridge. The company owns 508,000 square feet of space in Cambridge, and leases 885,000 more square feet of space in Massachusetts, at locations in Weston, Wellesley, Waltham, and Somerville, according to the company’s most recent annual report.

While cost savings were cited as a reason for the suburban move in 2009, Biogen’s fortunes have changed quite a bit in the year since Scangos took the helm. Scangos put his stamp on … Next Page »

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Zillow has updated its paperwork for a possible IPO for the second time. The online real-estate company added some traffic numbers for May—as Brier Dudley at The Seattle Times points out, it’s monthly growth of about 10 percent, to 22 million unique visitors for its website and mobile apps. Zillow notes that’s about 102 percent year-over-year. Zillow also has granted more stock options. Its new filing lists 630,912 options of Class A common stock granted May 23, at an exercise price of $1.87, based on a new valuation performed May 20. May 23 was also the date of the company’s first amended version of its IPO paperwork, but these options weren’t listed in that version.

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