Homestore.com Inc. (Nasdaq: HOMS) inked a five-year deal valued at more than $200 million with America Online Inc. (NYSE:AOL) to be its leading provider of real estate listings, the companies said Monday.
The company has also recently come under investigation by the Justice Department on anti trust issues.
Homestore.com's stock has plunged along with other "dot coms" over the past months, closing at 18 1/4 Friday, well below its 52-week high of 138. Though growth has been slow, the company had steadily been approaching a huge market cap.
As part of the deal, America Online will also receive 3.9 million Homestore.com shares and $20 million cash. Homestore.com is required to guarantee performance targets.
The deal will provide a home-related channel on America Online offering 22 million subscribers information about real estate, home services and relocation, the companies said.
Under terms of the alliance, Homestore.com will become the exclusive national provider in home-related areas across America Online brands such as AOL, AOL.COM, CompuServe, Netscape Netcenter and Digital City.
Homestore.com announced April 25. that it and the National Association of Realtors (NAR) was asked by the U.S. Justice Department's antitrust division to provide information for a probe into practices in the online real estate sector.
The company has been targeted due to concerns that it had offered special compensation to multiple listing services (MLS), or companies that compile real estate property information, to list their data exclusively on its site.
Homestore.com's main site Realtor.com lists homes for sale, its HomeBuilder.com site features lots, builders, and new homes, and its CommercialSource.com helps businesses find offices. Lycos (Nasdaq: LCOS) and Microsoft (Nasdaq: MSFT) compete with Homestore.com, as does newer entrant to the online home improvement market, ImproveNet (Nasdaq: IMPV)
Reuters contributed to this report.