Seattle online real estate company Zillow took a new, more open approach to its first quarter earnings conference call Tuesday, accepting and answering questions via social media side-by-side with those of professional analysts on the phone.
Michael Graham, managing director and senior equity analyst at Canaccord Genuity, who was covering Internet stocks in the late 1990s—when the fax machine was a crucial part of the toolkit—submitted the first question via Twitter that Zillow CEO Spencer Rascoff answered during the call.
“I’ve been doing this a long time, and the typical earnings call is a pretty productive thing, but also can get old and boring sometimes, so it’s nice to be able to try something new and leverage such a cool, pervasive platform like Twitter to ask a question of Zillow’s management team,” Graham said in a phone interview afterwards.
Rascoff also selected questions from beyond the crew of professional analysts covering the company, reading out and answering enquiries from stock strategists, journalists, and others who are usually resigned to “listen-only mode” during corporate earnings conference calls. (It wasn’t clear if any of the questions were from individual investors, though that potential exists.)
“By using Twitter or Facebook as a channel for investors to submit questions, Zillow is democratizing their earnings calls and improving the transparency around them,” Dominic Jones, editor of IR Web Report, which follows the ways technology is used by investor relations professionals, says in an email. “Zillow now has less control over who can ask questions and what people can ask, and by following the Twitter hashtag (#zearnings in this case) everyone can see which questions management chose to ignore.”
One that wasn’t answered: “will redfin going public and trulia having strong growth affect your bottom line? [sic]”
Outside of the room where executives held the call, a Zillow social media manager monitored incoming tweets, dropping them into a queue that an investor relations associate showed to Rascoff. He chose the questions to answer live during the conference call, says Zillow communications director Katie Curnutte.
Rascoff answered nine of 23 questions submitted via social media. Curnutte says the company is working on a blog post to answer questions that weren’t addressed on the call.
All the questions came via Twitter except one submitted on the company’s Facebook page. There were 175 tweets with the hashtag #Zearnings on Tuesday, providing the company with a real-time look at not just the type of questions being asked, but instant commentary, on its quarterly earnings report.
That’s potentially valuable to analysts, too, particularly of consumer Internet stocks, Graham says.
“A lot of times, retail investors have really good insights, and they’re super smart and they’re making great points. And a lot of times they’re not,” he says. “Being able to quickly scan through a lot of questions could definitely be a source of added value, gauging what people are thinking, how they’re reacting to it.”
Curnutte says recent Securities and Exchange Commission guidance on social media communications
