Microsoft, Softbank To Launch CarPoint Japan

has announced the formation
of a joint venture with Microsoft
and Yahoo! Japan Corp. to create a Japanese version of MSN
CarPoint, Microsoft’s popular US-based online automobile purchasing service.

The joint venture company, CarPoint
Japan KK will be capitalized in April at
about 840 billion yen (US$7 million). It will be owned 50 percent by
Softbank, Japan’s largest distributor of software and computer technology
publications; 40 percent by Microsoft; and 10 percent by Softbank-affiliate
Yahoo! Japan.

The MSN CarPoint Web site, opened in October 1995, is the most-visited online
car-buying service in the United States. It currently reaches more than 3
million users each month, generating over $450 million in monthly automobile
sales for its 2,500 auto dealers.

“The Internet is the ultimate marketplace that brings buyers and sellers
together in a more efficient and convenient transaction,” said Microsoft CEO
Bill Gates. “The Japanese version of CarPoint will give auto manufacturers
and dealers the opportunity to showcase their products and services to over
80 percent of the Internet audience in Japan.”

CarPoint Japan will offer localized content and services. Like the US
Web site, it will provide prospective buyers with comprehensive car-purchase
and car-care information, including model reviews, detailed specifications,
pricing and financing data, a buying service, and maintenance

Users will be able to contact dealers, get purchase price estimates, and
even make an appointment to test drive a vehicle.

Plans call for CarPoint Japan to open in November 1999 for new-car sales,
with used-car brokerage operations expected to get under way in February

“There have been individual efforts by car manufacturers to sell their
products over the Internet, but there is no independent source of
information in Japan yet,” said Softbank CEO and president Masayoshi Son,
who will serve as president of CarPoint Japan KK. “We think we can integrate
all of the information needed by customers to purchase a car online.”

By leveraging the Internet traffic flowing through search engine/portal site
Yahoo! Japan and MSN Japan’s existing subscriber base, CarPoint Japan will
have access to 80 percent of Japan’s Internet users.

Japan’s automobile market has been sluggish in recent years. Sales dropped
9 percent in 1998, with sales of imports falling by 22 percent.

Increasingly, as part of their effort to stimulate demand, Japanese
automotive dealers and makers are incorporating the Internet into their
sales and information dissemination strategies.

All of the major manufacturers, such as Toyota and Mazda, have Web sites featuring online showrooms and dealer information.

Many dealers, meanwhile, have installed Internet-based information kiosks in
their showrooms that allow prospective buyers to view visual simulations of
different car models and accessories and take simulated test drives.

In a recent poll of major car dealers in Kobe and Hyogo prefecture, 13
percent said they believe consumers are using the Internet to buy cars today
while another 75 percent said Internet sales will eventually catch on.

The dealers also expressed concern that the Internet could revolutionize new
car sales and possibly destroy the current system of dealer franchises and

Both Son and Lindsay Sparks, general manager for MSN CarPoint, expressed
confidence that the CarPoint Japan will gain industry support.

“We are very,
very conscious that dealers and manufacturers need to be brought together”
into the venture, Sparks said. “I thinkthat dealers’ business models will
shift, but in a profitable way.”

CarPoint Japan will include the Japanese version of DealerPoint, a service
designed to help automotive dealers track and manage their Internet
customers. Dealers pay a “lead” fee based on how many customers inquire
directly with them about a specific car through the Web site.

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