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Old Face, New CEO for Embattled Zillow

Zillow is turning to a familiar face to plow through a big transition. Richard Barton, a Zillow cofounder who had been serving as executive chairman, will replace Spencer Rascoff as CEO, the company announced Thursday. Zillow’s stock is down about 40% since last March, largely due to a slowdown in its core business, selling ads to real estate agents. Mr. Barton, in his third decade as an internet executive, could be a stabilizing force for investors.

This move is also worth watching because of Zillow’s aggressive expansion into a new risky business: home flipping. Investors have been skittish about the company’s recent moves to follow Opendoor’s lead in offering to buy homes immediately for a fee, fixing up those houses, and selling them quickly. It’s a major gambit—a potentially a huge market with slimmer margins than an internet advertising business.

Look for Mr. Barton to keep hunting for potential acquisitions, possibly smaller startups like Knock or Offerpad to try to make deeper inroads on Opendoor, which loaded up on venture capital and bank debt to launch in dozens more cities over the next year.

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