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Technology Stocks : Autobytel (ABTL) - Buy Autos online -- Ignore unavailable to you. Want to Upgrade?

To: Bill Ounce who wrote (589)	8/8/2001 5:31:11 PM
From: Glenn Petersen	Respond to of 594

Forbes does not think too highly of ABTL's prospects: forbes.com Autobytel Hits The Skids Penelope Patsuris, Forbes.com, 08.08.01, 2:26 PM ET NEW YORK - Car sales are strong and online auto shopping is up, so the road to success should be a smooth ride for Autobytel.com. But you'd never know it by looking at the car-shopping site's numbers. Second-quarter sales were down 8% from last year and 6% sequentially, and it had a loss of $5.3 million. Its shares have sunk to 85 cents. Visitors to Autobytel (nasdaq: ABTL - news - people) can shop around for a car and then find local dealers with whom they can do business, since the law requires all vehicle sales to go through dealers. This is a service car shoppers want. Five percent of all cars are now purchased through dealers found on the Web, according to automotive researcher J.D. Power and Associates. Another 12.5% of auto sales are influenced by Internet research, according to Jupiter, and that figure is expected to grow 300% over the next five years. Autobytel depends on monthly payments from car dealers that want access to the ready-to-buy car shoppers that the site sends to them. When its recent acquisition of competitor Autoweb is completed at the end of this quarter, Autobytel says it will have 60% to 70% of the online referral market. So why is its business stalling? Because participating dealers are dropping out. According to CEO Mark Lorimer, about 500 or so have defected, leaving the site with 4,200 of the country's 23,000 dealers. Dealers are defecting to cut costs and are instead going with cheaper, or even free, referrals they get from the manufacturers whose cars they sell. Once asleep at the wheel, General Motors (nyse: GM - news - people) and Ford Motor (nyse: F - news - people) now have sites that sell only their own brands, like GM's BuyPower.com and Ford's FordDirect.com. "Although dealers get more leads from independent sites," says J.D Powers partner Chris Denove, "they close a higher percentage of the leads they get from manufacturers, and the number of manufacturer-generated leads are on the rise." Like most businesses online, the game is now going to the established players who are finally making their Web presence felt. The dealers that do stick with Autobytel simply aren't paying enough to support its business. "Dealers pay the site a flat rate," says Denove. "In most states, it's illegal for them to pay sites based on the number of referrals they get, or to give them a cut of car sales." Knowing this, Autobytel had hoped to make the model work by getting more ancillary business, like managing car financing and warranties, which haven't panned out. Autobytel's Lorimar says he expects his core referral business to become profitable, but admits that growth will come from providing products and services to dealers and the manufacturers. With losses piling up, growth will make or break his business. This week, the embattled site got some good news along these lines. General Motors extended a test partnership it's doing with the car site by another 30 days. Since May 1, the companies have put inventory from 22 Washington, D.C.-area Chevrolet dealers online on a special section of Autobytel. GM wants to gauge how much inventory its dealers are willing to put online and to test the notion of listing market prices for cars instead of sticker prices. Deals like this with manufacturers will be critical to Autobytel's survival, but they're by no means guaranteed. "Autobytel was selected for the test not because of any long-term potential between them and GM," says GM's chief Web officer, Jerry Weiland. "This is a learning exercise. We are talking to other third party sites." Ouch. In February, GM revealed it is considering teaming up with its dealers to create its own all-makes, all-models shopping site à la Autobytel, instead of working with an existing player. "One way or another, we want to reach people who don't shop on GM's Buypower," says a spokesperson, "since that's the only way to expand our market." Autobytel's $17 million market cap makes it an easy purchase for GM, but why bother? GM has the technology that ties into its dealerships and gives shoppers real-time inventory updates, and it can certainly afford to tap into sources of far better traffic. The carmaker already has deals with AOL Time Warner (nyse: AOL - news - people) and the auto information sites from Kelley Blue Book and Edmunds. The piddling $1.6 million that GM is paying Autobytel for the D.C. test doesn't speak highly for how GM values the technology or the traffic the car site brings to the table, or for probable interest from any other manufacturer. Nor does it auger well for Autobytel's future.

To: Bill Ounce who wrote (589)	9/7/2001 1:43:14 PM
From: Crystal ball	Read Replies (1) \| Respond to of 594

The merger is about time. They need Critical Mass. They won't get it unless they have call up rental put on PALM devices that you can use right at the airport, so you can get anything from a taxi, to a car rental, to a lease to own. By the way, Why the MEDIA BLACKOUT? I would like to hear some news on Yankowski and Colin Powell speaking on PALM pda and high tech impact on society? bigcharts.marketwatch.com I am, Truly your$, -Crystal Ball Subject 51122