Until October 4th, 2001, when its stock sunk to an all-time low of $4.76 from a year-high of $43.62, Homestore (HOMS) was one of the darlings of the NASDAQ technology stocks. Like other companies which blamed the September 11 attacks for deteriorating markets, Homestore was on the decline long before.

Analysts such as Goldman Sachs, Prudential and Morgan Stanley, downgraded Homestore, following its warning that it would not make its pro forma numbers for the quarter. Homestore had announced that an already deteriorating advertising market was compounded by the loss of business due to the cancellation of sales visits to professional customers after the attacks.

Homestore seemed to be acknowledging for the first time that advertising and subscription sales are one and the same, and its reversal of fortune was rapid. On Sept. 6, the company had reaffirmed guidance calling for a pro forma profit of 16 cents a share on revenue of $134 million. A month later, it said it expected a pro forma loss, excluding nonrecurring items, of 1 cent to 6 cents on revenue of about $114 million to $118 million.

Now the stock is also going to take the brunt of economy recession fears, as analysts begin to wonder how badly a declining homebuying market will affect Homestore's subscription rates.

The negative sentiment started to grow like a virus with the publication of a Salomon Smith Barney analysis by Lanny Baker a few weeks ago, who conducted a private survey of professional Realtor subscribers affiliated with Homestore.com shareholder Cendant. He found that of the 176 surveyed, all had acquired their one-year subscriptions as part of a bulk purchase discount, but that only half knew they even had a subscription and of those who did know, only half said they would probably renew.

That suggested to TheStreet.com's George Mannes that Homestore has a "deep hole to claw out of."

"When the housing market slows, it really slows," wrote Mann. "Look at the last big slowdown, in the late 1980s, early 1990s. According to the National Association of Realtors, the number of real estate agents dropped about 15% over a period of about eight years. Remember, each time the profession loses a realtor, Homestore.com loses a potential subscriber."

While advertising sales have been down across the Internet, it could be that the real reason Homestore's sales are down is poor customer relations. Some agents are reporting that they are not renewing their subscriptions because of a variety of beefs they have with the company, namely lack of leads from the site.

Homestore is listings centric because people who go on the Internet want to look at homes, but that limits opportunities for agents to get leads, say some.

Broker Rich Czeh says that over 90 percent of his business comes from the Internet, but not from Homestore. Czeh and his partner own several Web sites, but of those, the Homestore I-LEAD lead generation subscription never resulted in a single lead, he says.

"My personal opinion is that Homestore is designed for the listings agents, but 75 percent of my business is buyers, we have some listings but not many," explains Czeh, a former Silver I-LEAD subscriber. "The odds are against buyers' agents. The site is actually designed to steer leads away from agents - just look at the neighborhood and school information."

Czeh says that he was involved in a school report lead generation program that Homestore bought out, and he was told that at the end of the year, Homestore would be redistributing those leads. "It is just a big grab for the leads, and they aren't really concerned about the agents, they will be giving the leads to agents who are paying the big bucks."

Dan Wool, director of public relations for Homestore says the company does have a lead capture tool for buyers agents. ""i-LEAD XL Silver includes two of the best lead generation applications available -- the XLerator prospecting tool and the REALTOR.com Reports tracking tool -- not to mention the ability to add up to six photos and enhance listings with custom ad copy, among other things," he says. "That, combined with the fact that REALTORS can update their i-LEAD XL listings in real time, is a potent combination of features that trumps mere newspaper ads.

Coldwell Banker broker Linda Devlieg is also unhappy - to the point that she is refusing the free Web site that was given to her via her brokerage's relationship with the company. (Cendant which owns a percentage of Homestore arranged to give their franchise brand agents Web sites.)

"A lot of us are talking about Homestore. I've cancelled everything with Realtor.com (Homestore's listing channel)" she says. "There has to be a better way."

Devlieg explains,"When I first signed up with Realtor.com I was the only New Mexico Realtor listed and I got a lot of activity, but now, unless you are paying the top-tiered rate, you don't get anything from it. I tested it and experimented with it and consistently found that when I acted as a consumer on a normal search, it always pointed to the agents who took advantage of the most expensive options. If what we are using it for is to gain business, then it shouldn't always default to the agents who are spending the most money."

"My second complaint is that their servers are down so consistently, every time I've had a client log in to my Web site, they would come back and say,'Your server's down,'" she continues.

Wool says the company has expanded its server farm. "According to Internet performance authority Keynote, our i-LEAD XL servers had 99.85% availability in September and have had 100% availability so far this month -- exceeding the average of the Top 40 companies Keynote surveys ("Keynote 40" average was 99.36% in September, 99.39% in October). Availability means that users can reliably access, receive and retrieve the Web files/pages they request from our servers," he says. "Few companies get 100% ratings, by the way."

There is also trouble with other technologies, complains Devlieg. "I've also had a lot of trouble uploading pictures to my site, and in having my listings show up. Often my listings appear with the wrong photos, even though I uploaded the photos myself," she says. "They claim that they get the information from the MLS, but they are showing errors that aren't in the MLS database. The mistakes seem to be at Realtor.com."

Customer care has been inconsistent, too, says Devlieg. "They just can't do anything about some situations," she says. "I signed up for a live chat, and never could get it to work, and customer care said it was down. And when I had trouble with the photos, they suggested I try back later. Homestore needs to understand that with our schedules, once you sit down to do something, you need to do it right then."

She notes with irony, "On the day that I e-mailed customer care to cancel my subscription, I got an immediate response back."

"This spring, Homestore dedicated a new customer care center in Arizona that now employs more than a hundred service and technology people who are all focused on the needs of REALTORS," says Wool. "In addition to our Customer Care specialists being there when i-LEAD XL customers encounter any difficulty, our dedicated i-Care team makes hundreds of phone calls each day to i-LEAD XL customers to make sure they are satisfied and to address any questions they may have about the product's features and functionality."

Even people who get leads from Homestore have mixed feelings toward the site. Realtor Donna Largen says, like Devlieg, she also has had trouble with her listings and changes on her listings showing up on Homestore (Realtor.com.)

"I copied the listings from the MLS and sent it to them, and they said they (Homestore) said they weren't set up to take them that way," says Largen. "Our MLS says they send them the feed, and there is nothing else they can do...they're having lots of problems."

Largen is also upset that the site once posted virtual tours from other providers for free, but since the company purchased the real estate portion of IPIX, other tours aren't allowed. If an agent wants to use another tour provider besides IPIX, Homestore will accommodate them if the tour provider pays a connection fee.

HomeAdvisor and Yahoo! Real Estate do not charge agents or their tour providers for posting virtual tours attached to listings.

"I'm at my renewal time for I-Lead and even though I've had good experience in the past...now I'm worried," she continues. "If we can't put in other virtual tours from other companies without paying more, and I can't get my listings on there, then how am I going to get leads?"

But Largen says she plans to be patient. "I'm willing to see if these things work out," she says. "I'll renew if it's the same price and doesn't go up."

Meanwhile, some analysts are still upbeat on the stock.

Deutsche Banc likes Homestore.com's ``high-margin, subscription-based revenue model appears to be somewhat defensible in the current economic climate,'' and one of the brokerage's analysts awarded the stock with a "buy" rating and a $23 price target.

In a face-off with Mannes, another TheStreet.com's writer, Glenn Curtis, says that while he doesn't believe Homestore has bottomed, he says that the stock is "nearing a point that is too attractive to pass up."

Curtis points out that Homestore is still sitting on about $229.5 million in cash, equivalents and short-term securities, equal to about $2.11 a share, and that it is trading very near a true-book value of about $3.48 a share.

But as it is, Homestore has little hope of regaining investor confidence and climbing the Nasdaq charts again without regaining the confidence of its paying customers first.

"We continue to invest in Realtors to ensure they have the best technology infrastructure available to them," says Wool.

Homestore closed yesterday at $7.70, up $1.70 (28.33%).