Bono, the lead singer of rock group U2, and Fred Anderson, former executive vice president and chief financial officer for Apple Computer, are part of a team that now has a vested interest in Homestore, a company that operates home-search Web sites including and

Homestore announced today that Elevation Partners, a private equity firm, has agreed to invest $100 million in the company in the form of convertible preferred stock. Anderson is a managing director and co-founder of Elevation Partners, and the firm’s leadership also includes Bono; Marc Bodnick, a founding principal of Silver Lake Partners; Roger McNamee, a co-founder of Silver Lake Partners and Integral Capital Partners; Bret Pearlman, a former senior managing director of The Blackstone Group; and John Riccitiello, the former president and chief operating officer for Electronic Arts.

Elevation Partners, according to its Web site, seeks to “invest in companies with an attractive core business model and potential for new growth.” The firm has a focus on the media and entertainment industry. “We believe that changes in technology and demographics have created new business opportunities for content owners and creators, many of which exist outside of traditional media and entertainment distribution channels. Elevation’s mission is to help media and entertainment businesses develop and market great content, take advantage of new platforms and channels, and address demand in new geographies.”

Through this investment agreement, Anderson and McNamee will join Homestore’s board of directors, increasing the number of directors from eight to 10.

“Homestore fits perfectly with our investment strategy. The online real estate media opportunity is very large and Homestore is the undisputed leader in the category,” Anderson said in a statement. “The combination of rich content for consumers and effective marketing solutions for real estate professionals provides Homestore with a platform for substantial growth.”

McNamee credited Homestore CEO Mike Long for helping to stabilize the company and position it for future growth. “This financing will allow Homestore to more aggressively expand its capabilities for both consumers and customers. We look forward to contributing to Homestore’s long-term success,” he stated.

Long said in a statement, “We are honored by Elevation Partners’ decision to invest in Homestore. Their team will contribute significantly to our strategic thinking. We are pursuing a very large market opportunity. As the real estate market changes, we expect online real estate media to be a primary beneficiary of the accelerating rationalization of the industry’s huge advertising spend. This new capital will help ensure that our customers have access to the highest value, most effective marketing solutions available anywhere.”

The company will further discuss the new agreement during its third-quarter earnings conference call on Tuesday.

The preferred stock is convertible into shares of Homestore’s common stock at $4.20 per share, or approximately 18 percent over the closing price per share of the company’s common stock on Nov. 4, 2005. If converted, the investment would represent approximately 14 percent of the Company’s shares outstanding, Homestore announced today. The preferred stock will pay an annual dividend of 3.5 percent of the liquidation preference, payable in additional preferred stock, for the first five years following issuance, after which it will be paid only in cash.

After the third anniversary following the issuance, Homestore may cause all of the preferred stock to be converted to common stock if the average closing price per share of the common stock during any 30 consecutive trading days is at least $7.77. The preferred stock is non-callable until after the fifth anniversary of the issuance and will be redeemed by the company on the seventh anniversary.

Homestore intends to use the net proceeds for general corporate purposes, including strategic growth initiatives or acquisitions, the company also announced. The investment is expected to close before the end of the year, subject to clearance under the Hart-Scott-Rodino Act. The convertible preferred stock will be sold in a private placement and will not be registered under the Securities Act of 1933.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 137.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription