Zillow Inc.’s (Z) efforts to expand beyond listing properties for sale online isn’t resonating with investors, who sent the stock plummeting after the company announced it acquired Mortgage Lenders of America late Monday.

In conjunction with second-quarter earnings results in which revenue was lower than Wall Street expectations, the online real estate company announced it acquired the Overland Park, Kansas-based mortgage company for an undisclosed sum. That did not sit well with investors who were already reeling from disappointing results out of other new businesses at Zillow.

As noted by MarketWatch columnist Therese Poletti, Zillow’s new Homes business had no revenue in the second quarter, while its Rentals business had only $33.3 million in sales, which was lower than the $34.5 million some industry watchers were expecting. Its other businesses had sales of $41.7 million, also shy of expectations of about $43 million, noted the article.  (See more: Zillow to Buy and Sell Homes in 2 Markets.)

The stock was trading over 17% lower in pre-market trading on Tuesday morning.

Zillow Misses on the Revenue Front, Lowers Guidance

For the three months ended in June, Zillow weighed in with adjusted earnings per share of $0.13, which was higher than the $0.09 Wall Street was looking for. Revenue of $325.3 million was shy of the $326 million Wall Street expected. For the current third quarter, Zillow is targeting revenue between $337 million and $347 million, which is lower than the consensus which stands at $408 million, according to FactSet data cited by YahooFinance. Zillow also lowered its full year revenue guidance from $1.43 - $1.58 billion to $1.32 - 1.35 billion, below analysts' estimates of $1.49 billion, according to Thomson Reuters. It slashed its full year adjusted EBITDA to $237 - $253 million from earlier guidance of $260 - $285 million, while analysts were expecting $277 million.

During a conference call to discuss second quarter results, Zillow’s Chief Executive Spencer Rascoff acknowledged that the new businesses may look “challenged” but that there are "good explanations of what's happening underneath each of them." The firm is also excited about the acquisition of Mortgage Lenders of America, which Rascoff said will “dramatically” expand the total addressable market for Zillow.

The executive added that revenue from the Zillow Offers home flipping business is delayed because the company hadn't anticipated how long it would take from when a seller says, "Yes," to when a seller actually puts the house to it.

“That’s delaying revenue because we don’t get the keys for four, six, weeks later than we expected, and then the renovation starts later and then the relisting starts later and then the revenue generation from when we resell the home occurs later,” Rascoff said. He noted the process is delayed further because homeowners who sell through the platform have to find a new house to purchase themselves. (See more: Next Housing Recession in 2020, Predicts Zillow.)

Mortgage Buy Won’t Cannibalize Existing Business

As for its deal to acquire Mortgage Lenders of America, Zillow said its expected to close during the fourth quarter of this year and that the acquisition will help it shorten the home buying process for those consumers who purchase via Zillow Offers. At the same time, Mortgage Lenders of America will continue to offer mortgages to consumers that use Zillow’s mortgage marketplace and those that don’t. In an attempt to address any concerns that owning a mortgage company will hurt its mortgage marketplace, Zillow said in a press release announcing the deal that its current advertising services for lenders remains a key element of its business and is something it plans to continue to support. The real estate company noted that last year 23 million consumers submitted loan information requests with Mortgage Lenders of America originating 4,400 mortgages through the Zillow marketplace. That means there is “plenty of opportunities” for independent lenders to continue to advertise on the Zillow Group platform, the company said.