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                                                                   EXHIBIT 10.4


                   EXECUTIVE RETENTION AND SEVERANCE AGREEMENT


This Executive Retention and Severance Agreement (the "AGREEMENT") is made and
entered into as of September 30, 2002 (the "EFFECTIVE DATE"), by and between
Homestore, Inc. (the "COMPANY") and Michael Douglas (the "EXECUTIVE").
Capitalized terms used in this Agreement shall have the meanings set forth in
Section 4, below.

1. Purpose. The purpose of this Agreement is (i) to encourage Executive to
remain in the employ of the Company and to continue to devote Executive's full
attention to the success of the Company and (ii) to provide specified benefits
to Executive in the event of a Termination Upon Change of Control or a
Termination in Absence of Change of Control, as such terms are defined in
Section 4 of this Agreement.

2. Termination Upon Change of Control. In the event of Executive's Termination
Upon a Change of Control, provided that Executive complies with Section 5.2
below and provides the transition services that the Company may request as
described in Section 5.3 below, Executive shall receive the following payments
and benefits:

        2.1 Accrued Salary and Vacation, and Benefits. Executive shall receive
all salary and accrued vacation (less applicable withholding) earned through the
conclusion of the transition period (or termination date if there is no
transition period requested by the Company), and the benefits, if any, under
Company benefit plans to which Executive may be entitled pursuant to the terms
of such plans. In addition, the Company shall pay 100% of the Executive's COBRA
premiums for the same or reasonably equivalent medical coverage he had on the
date of his termination for a period not to exceeds the earlier of one year
following termination or until Executive becomes eligible for medical insurance
coverage at a new employer.

        2.2 Cash Severance Payment. Executive shall receive a lump sum payment
in an amount equal to twelve (12) months of Executive's base salary (less
applicable withholding), paid within five (5) business days after the conclusion
of the transition period (or after the termination date if there is no
transition period requested by the Company).

        2.3 Stock Award Acceleration. Immediately prior to the effective date of
the Change of Control, 100% of all outstanding stock options granted and
restricted stock issued by the Company to Executive prior to the date of this
Agreement, including the options described in the Letter from W. Michael Long
dated September 30, 2002, (collectively the "Outstanding Options"), shall vest.
In addition, all vested Outstanding Options, including the accelerated options
described above, shall be exercisable by Executive for a period of one year
following the end of such transition period (if any) or one year following
termination if the Company requests no transition period.

        2.4 Cash Bonus Payment. Executive shall receive a payment in an amount
(the "Minimum Bonus Payment") equal to fifty percent (50%) of Executive's
"Target Bonus" for the year in which Executive's termination date occurs. In
addition, if Executive's termination date occurs in the second half of the year
(i.e. after June 30th), and all financial performance criteria


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established in Executive's bonus plan are achieved by the Company for the full
year in which Executive's termination date occurs, then the Company will pay
Executive an additional amount (the "Contingent Bonus Payment") equal to (i) a
pro rata portion of Executive's Target Bonus prorated based on the number of
days Executive is employed by the Company during such year, less (ii) the
Minimum Bonus Payment. "Target Bonus" means the total bonus amount Executive
would be entitled to receive for the entire year assuming achievement of 100% of
the financial and non-financial objectives established in Executive's bonus plan
(but not including any additional bonus amount payable for over achievement of
objectives). The Minimum Bonus Payment shall be paid in a lump sum within five
(5) business days after the conclusion of the transition period (or after the
termination date if there is no transition period requested by the Company)
without regard to the actual satisfaction of any performance criteria. The
Contingent Bonus Payment, if any, shall be paid in a lump sum within 90 days
after the end of the year in which Executive's termination date occurs. Payments
under this section shall be less applicable withholding.

3. Termination in Absence of Change of Control. In the event of Executive's
Termination in Absence of a Change of Control, provided that Executive complies
with Section 5.2 below and performs the transition services that the Company may
request as described in Section 5.3 below, Executive shall receive the following
payments and benefits:

        3.1 Basic Severance Compensation. Executive shall receive all salary and
accrued vacation (less applicable withholding) earned through the conclusion of
the transition period (or termination date if there is no transition period
requested by the Company), and the benefits, if any, under Company benefit plans
to which Executive may be entitled pursuant to the terms of such plans. In
addition, the Company shall pay 100% of the Executive's COBRA premiums for the
same or reasonably equivalent medical coverage he had on the date of his
termination for a period not to exceed the earlier of one year following
termination or until Executive becomes eligible for medical insurance coverage
at a new employer.

        3.2 Cash Severance Payment. Executive shall receive an amount equal to
twelve (12) months of Executive's base salary (less applicable withholding),
paid within five (5) business days after the conclusion of the transition period
(or termination date if there is no transition period requested by the Company.)

        3.3 Stock Award Acceleration. Upon Executive's termination date, 100% of
all outstanding stock options granted and restricted stock issued by the Company
to Executive prior to the date of this Agreement, including the options
described in the Letter from W. Michael Long dated September 30, 2002
(collectively the "Outstanding Options"), shall vest. In addition, all
Outstanding Options, including the accelerated options described above, shall be
exercisable by Executive for a period of one year following the end of such
transition period (if any) or one year following termination if the Company
requests no transition period.

        3.4 Cash Bonus Payment. Executive shall receive a payment in an amount
(the "Minimum Bonus Payment") equal to fifty percent (50%) of Executive's
"Target Bonus" for the year in which Executive's termination date occurs. In
addition, if Executive's termination date occurs in the second half of the year
(i.e. after June 30th), and all financial performance criteria established in
Executive's bonus plan are achieved by the Company for the full year in which


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Executive's termination date occurs, then the Company will pay Executive an
additional amount (the "Contingent Bonus Payment") equal to (i) a pro rata
portion of Executive's Target Bonus prorated based on the number of days
Executive is employed by the Company during such year, less (ii) the Minimum
Bonus Payment. "Target Bonus" means the total bonus amount Executive would be
entitled to receive for the entire year assuming achievement of 100% of the
financial and non-financial objectives established in Executive's bonus plan
(but not including any additional bonus amount payable for over achievement of
objectives). The Minimum Bonus Payment shall be paid in a lump sum within five
(5) business days after the conclusion of the transition period (or after the
termination date if there is no transition period requested by the Company)
without regard to the actual satisfaction of any performance criteria. The
Contingent Bonus Payment, if any, shall be paid in a lump sum within 90 days
after the end of the year in which Executive's termination date occurs. Payments
under this section shall be less applicable withholding.

4. Definitions. Capitalized terms used in this Agreement shall have the meanings
set forth in this Section 4.

        4.1 "Cause" means (a) your willful and continued failure to perform
substantially your duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness, and specifically
excluding any failure by you, after reasonable efforts, to meet performance
expectations), for thirty (30) days after a written demand for substantial
performance is delivered to you by the Chief Executive Officer of Homestore
which specifically identifies the manner in which the Chief Executive Officer
believes that you have not substantially performed your duties, or (b) the
willful engaging by you in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company. For purposes of this
provision, no act or failure to act, on the part of you, shall be considered
"willful" unless it is done, or omitted to be done, by you in bad faith without
reasonable belief that your action or omission was in the best interests of the
Company.

        4.2 "Change of Control" means (a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")), other than a trustee or other fiduciary holding securities of
the Company under an employee benefit plan of the Company, becomes the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of (A) the outstanding shares of common stock of the Company or (B) the
combined voting power of the Company's then-outstanding securities; (b) the
Company is party to a merger or consolidation, or series of related
transactions, which results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
another entity) at least fifty (50%) percent of the combined voting power of the
voting securities of the Company or such surviving or other entity outstanding
immediately after such merger or consolidation; (c) the sale or disposition of
all or substantially all of the Company's assets (or consummation of any
transaction, or series of related transactions, having similar effect), unless
at least fifty (50%) percent of the combined voting power of the voting
securities of the entity acquiring those assets is held by persons who held the
voting securities of the Company immediate prior to such transaction or series
of transactions; (d) there occurs a change in the composition of the Board of
Directors of the Company within a two-year period, as a result of



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which fewer than a majority of the directors are Incumbent Directors; (e) the
dissolution or liquidation of the Company, unless after such liquidation or
dissolution all or substantially all of the assets of the Company are held in an
entity at least fifty (50%) percent of the combined voting power of the voting
securities of which is held by persons who held the voting securities of the
Company immediately prior to such liquidation or dissolution; or (f) any
transaction or series of related transactions that has the substantial effect of
any one or more of the foregoing.

        4.3 "Company" means Homestore, Inc., any successor thereto and,
following a Change of Control, any successor or owner of substantially all the
business and/or assets of Homestore, Inc.

        4.4 "Diminution of Responsibilities" means the occurrence of any of the
following conditions, without Executive's consent and which condition is not
cured by the Company within ten (10) days after notice by Executive specifying
the condition: (a) a reduction by the Company of Executive's duties,
responsibilities, authority or reporting relationship such that Executive no
longer serves in a substantive, senior executive role for the Company comparable
in stature to Executive's current role, or no longer reports to the chief
executive officer of the Company; (b) a reduction in Executive's base salary or
the percentage of his base salary on which his target bonus is based, provided
that a reduction in base salary that is the result of a general reduction in
salary in an amount similar to reductions for other similarly situated Company
executives shall not constitute a "Diminution of Responsibilities"; (c) a
material reduction in benefits (other than future option grants), provided that
a reduction in benefits that is the result of a general reduction in benefits in
an amount similar to reductions for other similarly situated Company employees
shall not constitute a "Diminution of Responsibilities"; (d) the Company's
requiring Executive to be based at any office or location more than 50 miles
from the Company's headquarters in Westlake Village, California; or (e) a
material breach by the Company of the terms of this Agreement (or the Letter to
you from W. Michael Long dated September 30, 2002).

        4.5 "Disability" means the inability to engage in the performance of
Executive's duties by reason of a physical or mental impairment which
constitutes a permanent and total disability in the opinion of a qualified
physician.

        4.6 "Incumbent Director" means a director who either (1) is a director
of the Company as of the Effective Date, or (2) is elected, or nominated for
election, to the Board of Directors of the Company with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination, but (3) was not elected or nominated in connection with an actual or
threatened proxy contest relating to the election of directors to the Company.

        4.7 "Termination in Absence of Change of Control" means:

                a) any termination of employment of Executive by the Company
                without Cause (i) that occurs prior to the date that the Company
                first publicly announces it has entered into a definitive
                agreement or that the Company's board of directors has endorsed
                a tender offer for the Company's stock that in either case if
                consummated would result in a Change of Control (even though
                consummation is subject to approval or requisite tender by the
                Company's stockholders and other



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                conditions and contingencies), (ii) that occurs after the
                Company announces that any definitive agreement or tender offer
                referred to in clause (i) has been terminated and before it
                announces it has entered into another such definitive agreement
                or the board has endorsed another tender offer , or (iii) that
                occurs more than twelve (12) months following the consummation
                of any transaction or series of related transactions that result
                in a Change of Control; or

                (b) any resignation by Executive based on a Diminution of
                Responsibilities that occurs within one-hundred and twenty (120)
                days following the occurrence of one of the conditions that
                constitutes a Diminution of Responsibilities, but only where
                such Diminution of Responsibilities occurs: (i) prior to the
                date that the Company first publicly announces it has entered
                into a definitive agreement or that the Company's board of
                directors has endorsed a tender offer for the Company's stock
                that if consummated would result in a Change of Control (even
                though consummation is subject to approval or requisite tender
                by the Company's stockholders and other conditions and
                contingencies), (ii) after the Company announces that any
                definitive agreement or tender offer referred to in clause (i)
                has been terminated and before it announces it has entered into
                another such definitive agreement or the board has endorsed
                another tender offer, or (iii) more than twelve (12) months
                following the consummation of any transaction or series of
                related transactions that result in a Change of Control.

        Notwithstanding anything to the contrary herein, the term "Termination
in Absence of Change of Control" shall not include termination of the employment
of Executive (1) by the Company for Cause; (2) as a result of the voluntary
termination of employment by Executive for reasons other than a Diminution of
Responsibilities; or (3) that is a "Termination Upon a Change of Control."

        4.8 "Termination Upon Change of Control" means:

                (a) any termination of the employment of Executive by the
                Company without Cause during the period commencing on or after
                the date that the Company first publicly announces that it has
                signed a definitive agreement or that the Company's board of
                directors has endorsed a tender offer for the Company's stock
                that in either case when consummated would result in a Change of
                Control (even though consummation is subject to approval or
                requisite tender by the Company's stockholders and other
                conditions and contingencies) and ending at the earlier of the
                date on which the Company publicly announces that such
                definitive agreement or tender offer has been terminated without
                a Change of Control or on the date which is twelve (12) months
                following the consummation of any transaction or series of
                transactions that results in a Change of Control; or

                (b) any resignation by Executive based on a Diminution of
                Responsibilities where (i) such Diminution of Responsibilities
                occurs during the period commencing on or after the date that
                the Company first publicly announces that it has signed a
                definitive agreement that when consummated would result in a
                Change of Control (even though consummation is subject to
                approval or requisite



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                tender by the Company's stockholders and other conditions and
                contingencies) and ending on the date which is twelve (12)
                months following the consummation of the transaction or series
                of transactions that results in the Change of Control, and (ii)
                such resignation occurs within one-hundred and twenty (120) days
                following such Diminution of Responsibilities.

        Notwithstanding anything to the contrary herein, the term "Termination
Upon Change of Control" shall not include any termination of the employment of
Executive (1) by the Company for Cause; (2) as a result of the voluntary
termination of employment by Executive for reasons other than a Diminution of
Responsibilities; or (3) that is a "Termination in Absence of Change of
Control."

5. No Other Benefits; Release; Transition Period; Termination Under Other
Circumstances.

        5.1 No Other Benefits Payable. Executive shall be entitled to no other
compensation, benefits, or other payments from the Company as a result of any
termination of employment.

        5.2 Release of Claims. The Company may condition payment of the cash
severance and accelerated vesting of stock awards in Sections 2 or 3 of this
Agreement upon the delivery by Executive of a signed mutual release of known and
unknown claims related to Executive's employment in a form satisfactory to the
Company.

        5.3 Transition Period. In the event of Executive's Termination Upon a
Change of Control or Termination in Absence of a Change of Control, the Company
shall have the right exercisable by notice to Executive given at any time prior
to ten (10) days after the effective date of such termination to request that
Executive remain employed by the Company for such period following such
termination as the Company may elect, but in no event longer than 180 days
following the effective date of such termination. If Executive agrees to such
transition period (by giving notice to the Company within five (5) days after
the Company's notice to Executive), then during such period Executive shall
remain a full time employee of the Company at the rate of compensation and with
the same benefits as in effect on the date of his termination, shall perform
such duties consistent with his prior responsibilities as the Company shall
reasonably request, including services designed to transition his duties and
responsibilities to one or more replacements, and at the conclusion of the
transition period shall receive the benefits provided in Section 2 or 3 above as
the case may be. If the Company requests a transition period as provided above
and Executive does not agree to it, Executive shall receive the benefit of
Section 2.1 or 3.1 (computed through the date of termination), as the case may
be, but shall not receive the benefit of the other provisions of this Agreement.
The Company need not request a transition period, in which case Executive shall
receive the benefit of Section 2 or Section 3, as the case may be, and the other
provisions of this Agreement based on the date of actual termination. The
Company shall have the right at any time to terminate Executive during the
transition period, in which case Executive shall be entitled to the benefits of
Section 2 or Section 3, as the case may be. Executive shall have the right to
terminate his employment at any time during the transition period, but if
Executive shall fail or refuse to complete the transition period, other than as
a result of death or Disability, then Executive shall not be entitled to the
benefit of Section 2 or Section 3 (except Section 2.1 or 3.1 through the date
such services cease). In the case of Executive's death



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or Disability during the transition period, he shall be deemed to have completed
the transition period service for the full period requested.

        5.4 Termination Under Other Circumstances. In the event of Executive's
termination for Cause, or any resignation by Executive that does not constitute
a Termination Upon a Change of Control or a Termination in Absence of Change of
Control, the Company's sole financial obligations to Executive shall be to pay
to Executive all salary and accrued vacation (less applicable withholding)
earned through the effective date of Executive's termination or resignation, to
honor Executive's vested options and restricted stock (if any), and to provide
the benefits, if any, under the Company's benefit plans to which Executive may
be entitled pursuant to the terms of such plans. In the event of a termination
of Executive's employment (1) by the Company as a result of the Disability of
Executive or (2) as a result of the death of Executive, Executive (or
Executive's estate) shall be entitled to the benefits of Section 3.

6. Agreement Not to Solicit. If Company performs its obligations to deliver the
severance payments and benefits set forth in Sections 2 or 3 of this Agreement,
then for a period of one (1) year after Executive's termination of employment,
Executive will not solicit or seek to induce any employee, distributor, vendor,
representative or customer of the Company to discontinue that person's or
entity's relationship with or to the Company.

7. Arbitration. Any claim, dispute or controversy arising out of this Agreement,
the interpretation, validity or enforceability of this Agreement or the alleged
breach thereof shall be submitted by the parties to binding arbitration by the
American Arbitration Association. The site of the arbitration proceeding shall
be in Los Angeles County, California, or another location mutually agreed to by
the parties.

8. Conflict in Benefits.

        8.1 Effect of Agreement. This Agreement, together with the Letter to you
from W. Michael Long dated September 30, 2002, a copy of which is attached
hereto and incorporated herein by reference, the option agreements by which the
option grants referred to in the Memorandum are evidenced, and the
confidentiality and invention assignment agreement executed by you, shall
supersede all prior arrangements, whether written or oral, and understandings
regarding Executive's employment with the Company and shall be the exclusive
agreement for the determination of any compensation due to Executive from
Company as a result of Executive's employment with Company. In the event of any
conflict in these various documents, the provisions of this agreement shall
control the others and the Letter shall control the option agreements.

9. Miscellaneous.

        9.1 Successors of the Company. The Company will require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. In the event of a Change in Control in which the options granted by


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the Company to Executive cannot be assumed by the successor or assign, Company
shall give Executive reasonable advanced notice of such Change in Control, all
options granted by the Company to Executive shall vest and become exercisable
prior to such Change in Control, and Company shall allow Executive a reasonable
opportunity to exercise such options prior to such Change in Control.

        9.2 Modification of Agreement. This Agreement and the Memorandum
referred to in Section 8.1 above may be modified, amended or superceded only by
a written agreement signed by Executive and the Chief Executive Officer or an
authorized member of the Board of Directors of the Company.

        9.3 Governing Law. This Agreement shall be interpreted in accordance
with and governed by the laws of the State of California.

        9.4 No Employment Agreement. Executive acknowledges and understands that
his employment with the Company is at-will and can be terminated by either party
for no reason or for any reason not otherwise specifically prohibited by law.
Nothing in this Agreement is intended to alter Executive's at-will employment
status or obligate the Company to continue to employ Executive for any specific
period of time, or in any specific role or geographic location.


EXECUTIVE                                     HOMESTORE, INC.


/s/ Michael Douglas                           By: /s/ W. Michael Long
-------------------------------                 -------------------------------
Name: Michael Douglas                           Name: W. Michael Long
                                                Title: CEO


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