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Technology Stocks : Autoweb IPO 3/22/99 AWEB -- Ignore unavailable to you. Want to Upgrade?

To: Sojourner Smith who wrote (229)	3/30/1999 11:55:00 AM
From: RickM	Respond to of 696

Submitted for your critical evaluation; 'Big Three' Try to Woo Customers Away From Web Buying Services By JOHN DODGE Special to THE WALL STREET JOURNAL INTERACTIVE EDITION Disintermediation? Not when it comes to car sales -- at least not so far. Third-party buying services such as Autoweb.com Inc. (autoweb.com), Autobytel.com Inc. (autobytel.com), and Cendant Corp.'s AutoVantage.com (autovantage.com) have proved popular with customers and been embraced by dealers (see last week's column), but for auto makers they're another layer between the makers and their customers. So it's understandable that auto makers consider the buying services a nuisance, siphoning off even more customer mind share. But if you don't think the third parties serve a legitimate purpose, compare the buying services' sites with auto makers' offerings and see if you change your mind. The third parties offer consumers unbiased information and reviews they can't find on auto makers' sites, which are cluttered with propaganda. At Microsoft Corp.'s MSN CarPoint (carpoint.msn.com), for instance, you simply pick the make of car and drill down from there with little hoopla. Reaching the Chrysler models from www.DaimlerChrysler.com, on the other hand, requires at least four clicks -- one of which takes you to a page that hypes Chrysler as Motor Trend "Car of the Year." Learn more about John Dodge and search past columns in the new Dodge's E-conomy Center. This isn't to say that the inclusion of a full-page ad makes Chrysler's site worthless -- but it does illustrate the problems auto makers face. "They are hampered by political tensions with all the brands they have to deal with," says James McQuivey, an analyst with Cambridge, Mass., market-research firm Forrester Research Inc. "They've done a poor job of integrating them." Both auto makers and buying services "want to feel like they are end solutions," Mr. McQuivey says -- and both have succeeded with at least some consumers. More than half of all auto buyers last year bought the same make they had previously owned, Mr. McQuivey says, which suggests some degree of trust in auto makers. But on the other hand, he adds, "there are consumers who distrust the industry so much that they will always prefer a third party." And investors certainly like third-party buying services: AutoWeb went public in impressive fashion a week ago, surging to $40 in their first day of trading after being offered at $14 each, while Autobytel went public Friday at $23, traded as high as $58 and closed at $40.25. On Monday, AutoWeb shares slipped $3 to $29.75, while Autobytel's shares skidded $4.875 to $35.375. So forget any notion that because the auto makers are catching up, third-party buying services will evaporate. But auto makers are still fighting back -- here's a rundown on the efforts of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG. The biggest news recently has been the introduction of General Motors' www.GMBuyPower.com site, which made a splashy debut March 10. GM was smart to break its new offering out from its uber-site, www.gm.com, thereby minimizing distractions from serious shopping. The company will spend a reported $25 million this year to promote it. The site has the usual buying-service features for researching models, locating dealers and applying for financing. But it also offers some new twists, such as the ability to search dealer lots from the same database the dealer uses. For instance, I found eight Cadillac DeVille d'Elegance Sedans at a dealer lot within 10 miles of my home, which suggested I could probably get a pretty good bargain on that model.