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Homestore To Sell eNeighborhoods

February 6, 2002

Company To Focus On ?Making Real Estate Professionals Productive, Profitable?

By Marcie Geffner
Inman News Features

Homestore?s brand-new executive management today announced the sale of the company?s eNeighborhoods business unit, a staff reduction of 300 employees, a strategic review of the company?s operations and a restatement of senior management titles as the initial steps in an effort to refocus the troubled company on its core businesses and customers.

Homestore acquired eNeighborhoods in August as part of its purchase of iPlace in a $150 million cash and stock deal. ENeighborhoods was founded as Lysias in 1996 and became part of iPlace in February 2000. IPlace provides online credit report services as well as eNeighborhood?s compilations of neighborhood facts and figures, schools and housing data, crime rates, local climate conditions and other information.

Homestore didn?t disclose the terms of the eNeighborhoods sale, but a company spokesperson clarified that the sale encompasses only the original eNeighborhoods portion of iPlace?s operations.

The responsibilities of the 300 jobs to be eliminated this quarter weren?t disclosed in the company?s statement.

Westlake Village, Calif.-based Homestore, which operates Realtor.com and other homes-related Web sites, said its new management has conducted a strategic review of its businesses, investments, partnerships and corporate infrastructure spending.

W. Michael Long, a former WebMD executive who stepped into Homestore?s CEO slot a month ago, said Homestore customers and employees were involved in the business assessment and that the latest restructuring is intended to refocus the company on "making real estate professionals more productive and profitable."

Long also said the company was "disposing of non-strategic businesses and eliminating unnecessary investments and corporate services." But the company?s statement didn?t specify which businesses?if any, other than eNeighborhoods?would be on the block or detail which investments or services would be eliminated.

The spokesperson emphasized that management is refocusing the company on its customers and cited corporate marketing of the Homestore brand as an example of an investment in corporate services.

Long characterized the company?s focus as a positive development for the real estate industry and Homestore?s customers and employees.

"A more focused, leaner Homestore makes us a more reliable partner to the real estate industry, a better value for our customers and a more stable workplace for our employees. We will improve our core products and services and rely on the brands that are already widely recognized by our customers, tying our success more closely to that of our customers," he said in the statement.

Homestore?s announcement also reintroduced the company?s senior management in an effort to reflect who has been and will continue to head the company?s main operating units, the spokesperson indicated.

Real estate industry veteran Steve Ozonian remains in place as president of the Realtor.com operations, a position he has held since May 2000. The other top spots are held by Pat Whelan, president of Homestore?s HomeBuilder, Apartments and Rentals and consumer and advertising business units, Allan Merrill, EVP of business development, and Walter Lowry, SVP, general counsel and secretary.

Real estate industry veteran Joe Hanauer become chairman of Homestore.com?s board in early January. Hanauer had been a Homestore director since November 1996.

Other new officers named in early January were COO Jack Dennison and CFO Lew Belote, who also previously held executive positions at WebMD.

The company said the "new" management structure is "designed to align the company more tightly with its core real estate, builder and rental professional customers."

Homestore?s other directors are Barbara Alexander, senior advisor to UBS Warburg, John Doerr of venture capitalist firm Kleiner Perkins Caufield & Byers, William Kelvie, former chief information officer of Fannie Mae, Kenneth Klein of the National Association of Home Builders, Terrence McDermott, CEO of the National Association of Realtors, and Richard Smith, chairman of Cendant Corp.?s real estate division.

Copyright: Inman News Service



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