Leader Homestore faces anti-trust investigation

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Homestore.com has secured 95% of the nation's home listings, about 1.3 million entries, largely through its exclusive arrangement with the industry's largest trade group, the National Association of Realtors; NAR, including its executive members, owns about 11.4% of Homestore. The listings are available on the Realtor.com site and all of Homestore's sites.

In early May, Homestore inked a deal worth $200 million to establish a home channel on America Online.

Analysts said Realtor.com has become the Internet's most popular real-estate site because of its extensive database of homes for sale. It's that lockup of listings that sparked an investigation by the U.S. Justice Department's anti-trust division into possible anti-competitive business practices by Homestore, the site's executives said.

Justice Department anti-trust attorneys in late April requested information about Homestore's business strategy, including exclusive contracts with many of the nation's largest residential property listing services.

Homestore last year offered local realty boards and individual brokers warrants to buy stock as part of the company's initial public offering if those boards agreed to provide their listings exclusively to the site.

Homestore officials denied the company engages in anti-competitive practices and said they are cooperating with Justice Department officials. "As the market leader, we expected that they would ask us for some broad information about us that will help them understand our business and the online real-estate industry," said John Giesecke, chief financial officer of Homestore. "It's similar to what the government has requested of other category leaders, like Yahoo! and eBay. The government has not alleged wrongdoing, and we do not believe we have conducted our business in any way that would violate any laws or regulations."

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