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Subject: RE: Autobytel
From: John Braithwaite
Date: Tue, 23 Jan 2001 09:56:13 -0000

Sam Said:
Doesn't it depend on the value (to Autobytel) of each transaction? If
they're making a couple of thousand dollars on each sale, then it's probably
a reasonable conversion factor. I'd be surprised if it was much higher if
the main trade is very high ticket items like cars....or am I missing
something?

JB writes:
Hi Y'all

Having entered discussions with A-B-T about 3 years ago when I was working
as the MarComms Manager for a large dealer group in London, their business
model really wound me up.... because the way it is structured means that as
long as they have a big market share in the Online car 'request' market,
they will only get bigger.

Basically, they go to the dealer and say to them: "We want you to buy <this
area> (say 'East Croydon') for x,000 per annum" during this time we will
invest half of what you pay us into advertising and keep the other half for
ourselves. However any enquiries that come through for that region are the
dealers'. If you realise see that there are about 20-25 car brands in the UK
and it's split up into hundreds of areas - you can see the revenue stream
(or torrent). They are very nice blackmailers who say, basically, if you
don't get this business then we'll refer it to someone else. However, at the
moment, they are being hindered by the current 'rip-off Britain' attitude to
car buying - but, due to their pricing, they're less concerned about what
the car is sold for (although it has to be a 'best price' offer).

Funnily enough, they were the first .com to book the 'SuperBowl' advertising
slot - to enormous success - which led to all those others to assume that it
was the 'killer app'.

Cheers


John B



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