A zupdate on Zillow

Rich Barton is one busy guy. An ex-Microsoft (MSFT) exec and a founder of Expedia (EXPE), he’s currently chairman and CEO of Zillow.com, the most voyeuristically interesting Web site in the real estate business. On the side he’s also a director of Netflix (NFLX) and the children’s-advocacy group Common Sense Media; a partner with some Seattle buddies in a $10-million, quant-jock hedge fund the group plans to expand by taking outside money; a venture partner at Benchmark Capital; oh, and a founder of two new startups, Avvo.com and an unlaunched company called Glassdoor.

Barton also is disgustingly relaxed, as I learned when he dropped by my office Tuesday morning, mostly to talk about Zillow. If you don’t know Zillow, which is based in Seattle, first read Jeff O’Brien’s rollicking cover story last year in Fortune. It explains how Zillow has attracted a wide audience of titillated homeowners and shoppers who like to check on Zillow’s “Zesstimates” of the value of just about any home in America. To hear Barton tell the tale, the company continues to rock. Unlike every other real estate Web site, Zillow is a pure media company. Its only goal is to sell advertising, and it’s doing that with an increasing drumbeat of ingenious creations. Jeff wrote last year about Zillow’s “Make Me Move” feature, where homeowners edit Zillow’s listing of their own house and then taunt the curious to make them an offer they can’t refuse. Since then the company has added catchy ideas like a mortgage marketplace, where prospective borrowers anonymously post their needs and lenders publicly state their terms. Another new feature is “Dueling Digs.” I’ll just describe it as the Hot or Not of real estate and let you check it out for yourself. (Watch for a related “home improvement” section to be Zillow’s next practical, as opposed to entertaining, site feature.)

So how’s Zillow doing? “It has embedded itself into the process of real estate,” he says, with about the amount of modesty you’d expect from someone with his list of accomplishments. Barton says the company had 5.2 million unique visitors to the site in March, according to internal logs provided by Omniture (OMTR), whose numbers typically are higher than third-party ratings. Two million homes are for sale at Zillow, thanks to the site having won over real estate agents happy to accept its free services. It sports advertisers include homebuilders like Lennar (LEN), Verizon (VZ) (which advertises only to areas it serves with the specific service it is promoting on Zillow), and Deere (DE), for whom Zillow tailored an ad program that appears only on homes whose acreage justifies the purchase of a riding mower. That’s not only freaking smart, it’s a perfect example of the kind of targeted advertising the Web delivers better than any other medium.

Zillow also sells ads the same way everyone else does, through Google’s (GOOG) publisher network, AdSense, as well as with a national sales force. Barton says the 150-person company isn’t profitable yet but that he can “see profitability.” He has raised a total of $87 million from an investor list that includes Benchmark, Technology Crossover Partners, the Boston hedge fund PAR Capital Management, and Legg Mason (LM), whose behind-the-scenes investing guru (and ex-journalist) Randy Befumo has an observer seat on the Zillow board.

As Barton prepares to leave, I do wonder aloud if the housing downturn won’t render Zillow a bit player. Unsurprisingly, he’s ready. “We think people are spending more time online shopping for homes now,” he says, noting that the end of the frantic days of bidding on homes immediately or losing out play to a Web site’s advantage. But what if, I ask, the great homeowning game of the last few decades has played out, if we go back to being a nation of some owners and many renters? “Shelter is primal,” responds the entrepreneur, for whom starting companies clearly is just as ingrained.