Joseph Shew, who joined the company as CFO only in February, abruptly resigned yesterday. Shew was unavailable for comment today, and a Homestore.com spokesman would say he left only for "personal reasons."
Though Homestore.com offers a limited amount of investment-property listings, it was primarily formed about four years ago to market homes and residential real estate services over the worldwide web. It quickly garnered about 95% of all US home listings, thanks partly to its ties to the National Association of Realtors and the National Association of Home Builders–the two largest trade groups involved in America's residential real estate market.
The company was still reporting strong revenue growth earlier this year, even as many other real estate web sites continued to cut back or had already gone out of business. In fact, some analysts say, Homestore.com actually benefited from the consolidation because it eliminated many of the company's competitors while also allowing the firm to pick up those with the brightest outlooks for pennies on a dollar.
But the economic slowdown and resulting drop in Internet advertising finally began catching up with Homestore.com this summer. In October, the company said it would lay off about 700 staffers—roughly 20% of its workforce—and realign its corporate structure to include new groups that focus specifically on advertising sales and acquisitions.
At the same time, Homestore.com also warned analysts that its earnings would fall short of Wall Street's expectations. The company soon reported a $106-million loss for the third quarter on a 44% drop in ad revenue.
The October layoffs were followed by Homestore.com's announcement last month that it could take a fourth-quarter charge of as much as $950 million to reflect the falling value of its previous acquisitions. Several analysts have since cut their ratings on the company's shares.
Homestore.com's stock was selling for $2.55 a share in afternoon trading on Wall Street Friday, less than half its price of two months ago. Its 52-week high was $37.25.
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