The portal will buy the real estate information company in a cash and stock deal, further solidifying its dominant position in online real estate.
Homestore is paying about $70 million in cash and $80 million in stock, and said it expects the deal to close in the third quarter of this year.
Friday's buy further solidifies Homestore's dominant position in the online real estate market. Earlier this year, it closed an $890 million acquisition of Cendant's Move.com.
Several Internet giants have targeted the online real estate market as a potential profitable area. For example, Monday, auction giant eBay announced plans to acquire real estate auction site HomesDirect.com, and Microsoft provides real estate listings through its HomeAdvisor.com site.
Homestore runs Realtor.com--its flagship site--earning fees through advertising and client referrals. The company has deals with the National Association of Realtors, AOL Time Warner and others to point visitors toward Realtor.com
Privately held iPlace said it has notched up more than 600,000 paid consumer subscriptions across its network of sites, which provide home-sale information, credit reports and credit monitoring services. The companies said their merger would make them one of the top 20 most visited Internet networks.