America Online named Homestore.com as its exclusive content provider. The agreement greatly expands a 1998 content distribution agreement between the two companies; the new five-year, multifaceted content, e-commerce and distribution alliance is valued at more than $200 million. The agreement spreads Homestore.com's real estate, home, apartment and moving services listings to several key AOL brands, including creation of a new home-related channel. Under terms of the agreement, America Online will receive approximately 3.9 million shares of Homestore.com common stock, which Homestore.com is required to guarantee to meet certain performance targets throughout the term of the agreement. As part of the guarantee, Homestore.com will issue a $90 million letter of credit, which will be drawn upon only if Homestore.com's common stock does not meet the performance targets. AOL will also receive $20 million in cash as part of the agreement.
Copyright May 2000, Crain Communications Inc.