Does Zillow CEO’s exit mean the IPO’s off?

Rich Barton is a wealthy man, having made a well-deserved fortune as the founding CEO of Expedia, the pioneering Internet travel agent. So it’s always been a bit of a mystery why Barton (pictured left) has been working so hard as the CEO of Zillow, the Seattle-based online real-estate price estimator and marketplace.

Mystery solved: The company has announced that COO Spencer Rascoff is replacing Barton as CEO. Zillow, of course, is trying to cast this as a smooth transition. Rascoff, formerly Zillow’s chief financial officer and head of marketing, has been running much of the company’s operations. And Barton is remaining as chairman, a classic move that Silicon Valley spinmasters like to call “stepping up,” not “stepping down.”

The company’s real-estate strategy, originally focused on generating real-estate transaction leads through providing home owners with price estimates, is now a bit all over the map. It has an ad-sales partnership with Yahoo, launched mobile services on the iPhone and Android devices,

It raised $30 million in 2007 from Legg Mason Capital Management, who joined previous investors Benchmark Capital and Technology Crossover Ventures, among others. The company laid off 40 employees in late 2008.

The five-year-old company is now profitable, a company representative said, adding that Zillow broke records in traffic, mortgage requests, sales, and mobile traffic.

There’s one reason why Barton has stuck around as long as he has: The hope that Zillow might go public. Rascoff himself stirred up talk of an IPO earlier this year. But Rascoff hasn’t run a publicly traded company as CEO; Barton has. He would be a familiar face to Wall Street — one who might be able to sell a not-quite-ready company to skeptical buyers.

The shift at the top suggests impatience: Perhaps on Barton’s part to move on, perhaps on Rascoff’s part to get the CEO title, perhaps on Zillow’s investors’ part to get this company sold.

It’s telling that Rascoff has a background in both finance and marketing. His challenge now, more than ever, is to sell not Zillow.com, but the company itself, to some willing buyers.