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eBay Revs Up Auto Sales

eBay's automotive business, one of its fastest growing segments, shifted up a gear with the acquisition of CARad.com and a new deal to become the exclusive auction partner on Kelley Blue Book's kbb.com, one of the better-known auto sites.

San Jose, Calif.-based eBay , which said recently that its eBay Motors operation is now generating $4.3 billion in sales (based on annualized fourth quarter 2002 results) said it is acquiring certain assets of Texas-based CARad.com, an online auction management service for car dealers.

The kbb.com deal means that automotive shoppers who use that site for research and pricing information will have direct access to the relevant vehicle listings on eBay Motors. And consumers who want to sell their used vehicles and are looking for content and pricing information on kbb.com will be able to link to eBay Motors to list their used vehicle.

The agreement also will allow thousands of franchise dealers nationwide who use KarPower, Kelley Blue Book's dealer inventory management software, to more easily list their inventory on eBay Motors.

Financial arrangements were not disclosed for either deal, but eBay did say that "based on its current business outlook," the acquisition would not affect its most recent financial guidance for the first quarter and the full year 2003

eBay said it expects these new relationships to let auto dealers more easily manage a higher volume of auctions, while also helping more buyers find the cars they want on eBay Motors. Links to eBay were already up on the CARad site.

Both steps would seem to make sense for eBay, which has on occasion purchased some real-world businesses that turned out to be less than a perfect fit. That's why it sold off collector car business Kruse International last fall, making it clear that online is where it wants to be.

eBay Motors sold more than $3 billion worth of vehicles and parts on its site in 2002.