DONNA HARRIS

More mergers = less competition

Donna Harris covers retail issues for Automotive News
So ADP Dealer Services is buying Cobalt, a Seattle company that provides digital marketing and consulting services to car dealers.

History certainly does repeat itself. The two largest players in the dealer computer business -- ADP and Reynolds and Reynolds Co. -- have been gobbling up smaller, innovative technology companies over the years.

And while that's been good for ADP and Reynolds, it hasn't always been so great for dealers.

The smaller upstarts have forced the Big Two in the dealer systems business to provide more competitive products at better prices. Take some of them out and you maintain the status quo.

Dealers have made progress negotiating better prices on IT in recent years and especially last year during the downturn. Let's hope that progress continues.

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