Homestore Reports Fourth Quarter and Full Year 2005 Results; Fourth Quarter Revenue up 23 Percent; Full Year Revenue up 16 Percent; Full Year Positive GAAP Net Income

Business Wire, March 2, 2006

WESTLAKE VILLAGE, Calif. -- Homestore, Inc. (NASDAQ:HOMS), the leading provider of real estate media and technology solutions, today reported financial results for the fourth quarter and full year ended December 31, 2005. Total revenue for the fourth quarter was $66.6 million, compared to $54.3 million in the fourth quarter of 2004. Revenue for the full year 2005 was $252.6 million, compared to $216.9 million for the full year 2004.

The net loss for the fourth quarter was $(4.6) million, or $(0.03) per share, compared to net income of $6.0 million, or $0.04 per share, for the fourth quarter of 2004. The net loss for the current quarter includes legal expenses of $5.9 million, reflected in general and administrative costs related to a settlement with a former officer to limit the Company's obligation to reimburse defense costs and a $1.8 million litigation settlement expense. Results for the fourth quarter of 2004 included a gain on the disposition of assets totaling $7.3 million, and an increase in estimates of previous restructuring charges of $971,000. Net income for the full year 2005 was $234,000, compared to a net loss of $(7.9) million for the full year 2004.

Homestore's EBITDA (earnings before interest, restructuring charges and certain other non-cash expenses, principally stock-based charges, depreciation, and amortization) for the fourth quarter of 2005 was a loss of $(2.8) million, compared to earnings of $2.9 million for the fourth quarter of 2004. Homestore's EBITDA for the full year 2005 was $5.4 million, compared to an EBITDA of $2.6 million for the full year 2004. Excluding legal expenses related to reimbursement of defense costs of former officers, which totaled $5.9 million in the fourth quarter and $15.6 million for the full year, EBITDA would have been $3.1 million and $21.0 million in the fourth quarter and for the full year 2005, respectively. The Company has reported EBITDA because management uses it to monitor and assess the Company's performance and believes it is helpful to investors in understanding the Company's business.

"2005 was an important year for the Company. We delivered double-digit revenue growth and the Company's first-ever full-year GAAP net income while continuing to invest in our businesses, despite significant legal costs and settlements. The early success of our investment program is providing operating momentum, which together with our enhanced financial flexibility, positions us for further growth in 2006," said Mike Long, Homestore's chief executive officer. "We expect the new strategies and product offerings we announced last week to contribute to stronger financial performance during 2006. Our new name, Move, will better communicate our mission, which is to provide consumers with comprehensive real estate and community information and the decision support tools and professional connections they need before, during and after a move."

The Company announced significant new strategic developments and new products on February 22, 2006, including the intention to change the Company's name to Move, Inc. to coincide with an expanded commitment to offering consumers comprehensive real estate listings, decision support tools, and access to qualified real estate and move-related service providers. Move, Inc. will have three compelling consumer offerings: Realtor.com, Move.com and Welcome Wagon. The new name unifies the Company's strategy of providing a platform for connecting consumers with Realtors, home builders, rental property owners and other move-related advertisers before, during and after a move. Along with the new brand, in the second quarter, the Company will launch an all new real estate search engine site, Move.com, as well as additional products and features designed to provide the best consumer content experience available. Consistent with that goal, Homestore has acquired Moving.com, a best-in-class online provider of consumer moving tools and access to qualified moving services.

As a result of the new strategy, the Company has re-aligned its financial reporting segments. Beginning in the fourth quarter of 2005 the Company now has two segments instead of three: Real Estate Services, which includes Realtor.com, Top Producer, HomeBuilder.com and RENTNET; and Move-Related Services, which includes Welcome Wagon, Retail Advertising and Plans and Publications, and will include, Moving.com in future quarters. Attached to this press release are tables showing the revenue and operating income (loss) for the past eight quarters in this new segmentation for comparative purposes.

At December 31, 2005, Homestore had $152.3 million in cash and short-term investments available to fund operations. The increase of $92.9 million from last quarter includes approximately $94.1 million in net proceeds from the sale of convertible participating preferred stock.

CONFERENCE CALL

As previously announced, Homestore will host a conference call, which will be broadcast live over the Internet today, Thursday, March 2, 2006, at 2:00 p.m. PST (5:00 p.m. EST). Chief Executive Officer, Mike Long, and Chief Financial Officer, Lew Belote, will discuss the Company's fourth quarter and full year 2005 results. In order to participate in the call, investors should log on to http://ir.homestore.com and click on "Event Calendar." Please connect to the above Web site ten minutes prior to the call to load any necessary audio software. A replay of the call will be available in the same section of the Company's Web site two hours after the end of the call. A telephone replay will be available from 5:00 p.m. PST (8:00 p.m. EST) until midnight on March 9, 2006 at 888-286-8010. For additional information regarding the Company's results, please go to the "SEC Filings" section at http://ir.homestore.com to view annual reports as filed with the Securities and Exchange Commission on Form 10-K. Homestore's Form 10-K for the year ended December 31, 2005 is expected to be filed with the Securities and Exchange Commission on, or before, March 13, 2006.