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Homestore reports wider 2000 loss

The online real estate company concludes its internal investigation and issues revised 2000 figures--and the results are worse than expected.

Homestore.com concluded its internal investigation and issued revised 2000 figures on Tuesday--and the results are worse than expected.

The company's net loss was $31 million greater than it originally stated, Homestore said in a filing with the Securities and Exchange Commission. The online real estate company's revenue in 2000 was $181 million, $49 million less than it originally reported and $5 million less than it indicated last month.

A Homestore representative said Tuesday that the information released last month didn't include an estimate on the effect of an accounting change. "This is what the investment community wanted to know. This is what the Nasdaq wanted to know," spokeswoman DeLise Keim said.

Once a star of the Internet economy, Homestore has been reeling in recent months after a larger-than-expected third quarter loss led to an internal investigation, a management shake-up and a restructuring that involved 300 job cuts.

In the meantime, the company's stock has plummeted, leading to shareholder lawsuits and a multimillion-dollar write-off by Cendant, one of Homestore's largest investors.

The company said it overstated 2000 revenue by $41.4 million, most of it stemming from recording barter exchanges as cash transactions. It also improperly recognized $5.1 million in revenue for its software products, the company said. The accounting change forced the company to reduce its 2000 revenue by another $7.2 million.

SEC officials have yet to weigh in on Homestore's announcements, but Nasdaq officials warned investors that it is taking steps to delist Homestore because its financial statements are not up to date.

Later this month, Homestore will issue a restatement of the revenue for the first three quarters of 2001.