Shakeout foreseen for car-buying sites;Independents regroup as manufacturers hit the gas in overcrowded category.

Advertising Age, May, 2000 by Halliday, Jean

Are these the best or worst of times for online car-buying services? In many cases, revenue is rising for car sites, but few are posting a profit. Several are re-evaluating business models and ad strategies. Some are looking for dance partners with carmakers, portals or other Web sites to drive business to their sites.

"There are already more services than the market can handle," said Chris Denove, director of auto-consulting operations at consultancy J.D. Power & Associates. He said there are about a dozen "significant, independent players" and foresees an industry shakeout in the next 12 to 18 months with the urge to merge or form alliances gaining momentum. Mr. Denove said the window of opportunity already is closed to newcomers lacking deep pockets. "If...

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