A brief history of Homestore
An article in Corporate Board Member magazine (a free registration is required to access the article) details Homestore's (now Move Inc.) fall from grace and the climb back from disgrace following an accounting scandal that shook up its management team.
The article details how board members and CEO Mike Long, who came aboard in January 2002, helped to steer the company out of darker times.
The accounting scandal pulled down the company's share price to about 14 cents after the scandal began to unfold in November 2001, the article notes – in 2000 the share price had reached $138.
It was Homestore director John Doerr who had suggested Long as a potential candidate for the CEO post -- Doerr met Long at an IBM technology conference and recruited Long to lead a company that later bought WebMD.com, the article states.
Long, a farmer's son from North Carolina, had earlier worked for Continuum, a producer of insurance industry software that was sold to Computer Sciences Corp. for $1.7 billion in 1996, the magazine reported.
The management team that Long assembled after the accounting shakeup at Homestore included Lew Belote, who had been vice president of finance at WebMD, and Jack Dennison, former general counsel at Continuum. He also brought in Michael Douglas as Homestore's chief counsel -- Douglas had negotiated a $4 billion insurance settlement as general counsel for a company that used asbestos in its products.
"To handle all our lawsuits, I knew I'd need somebody with ice in his veins, and asbestos work gives you that," Long told the magazine.
Homestore had owed an estimated $200 million to AOL and $700 million to Cendant Corp. (now Realogy) for past transactions, and Long negotiated deals to forgive those amounts, the article notes. "We didn't have the money," Long stated. Time Warner CEO Richard D. Parsons "authorized the AOL team to negotiate a deal with us. He ... chose to look to the future rather than wage war over the past."
Long, who had purchased a private plane (a Dassault Falcon) after the sale of Continuum, used the plane a lot -- "often hitting three or four cities a day" for his work in those restorative days at Homestore.
The article also notes that before the name change to Move Inc. in 2006, other suggested new names for the company included "Residot" and "Avenue R."
Long said in the article that while board members at Move may sometimes have differing opinions, they always seem to arrive at a consensus: "I've never left a board meeting where the directors have been divided."
The article also notes that the company's valuation is up to $787 million, compared to $19 million when Long took the wheel.
–Glenn Roberts Jr., Inman News
