Not so fast, read the Prospectus.
Before y'all get excited about the little blurb from ZDnet read the prospectus and then make your call if you are interested in the thing.
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Extracted from the company prospectus.
.......Our revenues have increased from $274,000 in 1995 to $23.8 million in 1998. We derive substantially all of our revenues from fees paid by subscribing dealers, and we expect to be primarily dependent on our dealer network for revenues in the foreseeable future. Dealers using our services pay an initial subscription fee, as well as ongoing monthly fees based on the aggregation and transmittal to them of purchase requests and through fiscal 1997, an annual fee.
In January 1998, Autobytel.com started to eliminate annual fees and increase monthly fees to subscribing dealers. Average monthly program fees per dealer were $947, $785 and $557 in 1998, 1997 and 1996, respectively. We also derive some revenue on a per transaction basis by facilitating transactions between consumers and other third parties, primarily lenders and insurance companies. We reserve the right to raise our fees to dealers after 30 days notice.
Since the end of January 1999 and on a going forward basis we are
converting our dealers to new contracts with one year terms. Initial
subscription fees from dealers are recognized ratably over the first twelve months of each dealer's contract in order to match the costs of integrating and training dealers with revenues earned. Amortized revenues from initial subscription fees were $2.4 million, $3.8 million and $2.2 million in 1998, 1997 and 1996, respectively. We anticipate that our initial subscription fee amortization revenue will decline as a percentage of total revenue over time as monthly fee revenues continue to grow. As our dealer network grows in absolute terms, the number of new dealers added as a percentage of total dealers is growing at a slower pace. Therefore, initial subscription fee revenue is declining as a percentage of total revenue while monthly fee revenues are growing. Monthly fees are recognized in the period the service is provided.
Monthly fee revenues were $18.2 million, $8.5 million, and $2.6 million in 1998, 1997 and 1996, respectively. Annual fees are recognized ratably over twelve months. Amortized revenues from annual fees were $2.3 million, $1.1 million and $103,000 in 1998, 1997 and 1996, respectively. Annual fee revenue will decline in 1999 because we discontinued the practice of charging annual fees in late
1998..... |
