Was Canadian real estate website Zoocasa a victim of its own success? Or was the announcement by owner Rogers Communications that the site will shut down at the end of the month a reflection of growing losses – estimated by one source as $1 million a month for much of the last two years?

Rogers Communications spokesperson Allison Fitton would only say the decision was made “so we can focus the additional resources (of running Zoocasa) on core areas of Rogers’ business – consumer, enterprise, cable and wireless.”

In the AIM Group’s profile of Zoocasa in our 2014 Real Estate annual report, we wrote about Zoocasa president Carolyn Beatty’s makeover of the site that saw it “straddling an online brokerage – ala Redfin in the U.S., which employs its own in-house Realtors – and a boutique virtual agency working with a select group of top performing Realtors who still keep their jobs at their respective companies.”

Zoocasa switched to the virtual in-house Realtor model after failing to differentiate itself from MLS listing sites such as Realtor.ca. Rogers launched the company in 2008; the new model came online in 2012 with the company transforming into an officially registered real estate brokerage in the process.

Homeseekers and sellers who used one of the couple hundred Zoocasa agents would receive a rebate of about 15 percent of the standard agent Realtor commission. Agents would in turn pay 35 percent of their commission to Zoocasa. That fee was supposed to finance the now ad-less Zoocasa design.

But high administrative and technology platform costs apparently outstripped the number of real estate deals made on the site. Still, the timing for the shut down was a bit surprising: Rogers had just undertaken a substantial advertising campaign for Zoocasa.

While Zoocasa was probably foiled by the costs of running an unprofitable business, it had achieved success in another area: it sent out an email list of “daily sold” properties by neighborhoods. The service was so popular, it was shut down…after the Toronto Real Estate Board (TREB) argued that Zoocasa-affiliated Realtors were violating TREB rules by sharing private customer data with the site. TREB even threatened to take away offending agents’ MLS access. Zoocasa bowed to the pressure and stopped publishing its daily updates.

Zoocasa closes its cages on June 22, after which “the brokerage will cease to be registered and will be prohibited from trading in real estate as a brokerage,” Zoocasa announced in a letter to its customers this week.

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