The two companies will join forces in the competitive online car-buying space, hoping to improve their reach to those looking to buy a vehicle online.
Under the agreement, each company will make undisclosed investments in the other. Autoweb.com (AWEB) and CarsDirect.com will jointly develop a co-branded new-car buying service on Autoweb.com, and Autoweb.com will become the only referral buying option for CarsDirect.com. Also included in the agreement are placement of exclusive links between the two companies’ sites, and licensing of data content and tools.
In addition, the companies said they will pursue ways to work together as infrastructure partners on future product development.
“Autoweb.com is a leader in aggregating car buyers and has enormous traffic,” said Bob Brisco, chief executive officer of CarsDirect.com. “By jointly building a direct sales option for Autoweb.com users, we will be able to dramatically expand the reach of the CarsDirect.com service. We are looking forward to an ongoing, multifaceted relationship with Autoweb.com that will
set a new standard for our industry.”
According to J.D. Power and Associates, 55 percent of Americans who buy a car this year will use the Internet at some point in the process, and the figure is expected to grow to 80 percent by 2003. Online Internet transactions are increasing at an even faster rate — nearly 3 percent of new cars were sold through the Internet in 1999. The intent of the alliance is to accelerate that growth trend.
“Autoweb.com and CarsDirect.com are clearly focused on helping more consumers find and buy their vehicles through the Internet,” said Dean DeBiase, Autoweb.com’s chairman and CEO. “We believe CarsDirect.com provides the best experience for car buyers who wish to purchase a vehicle completely online, and together we will offer the most comprehensive direct new car buying service to Autoweb.com consumers.”