Microsoft Corp. last week launched a new-car buying service over the Internet that is designed to solve one of the biggest problems companies have had in using the global computer network for marketing.
The company is guaranteeing it will match all customers with dealers even if customers are in remote locations. The buying service is on Microsoft's CarPoint Web site (http: carpoint.com).
'We'll be able to handle any lead that comes in,' said Lindsay Sparks, CarPoint general manager.
Some Internet auto marketers have had trouble offering a truly nationwide service because they could not sign up enough dealers to blanket the country.
Microsoft has enlisted 500 dealers in the top 15 markets. Although Microsoft plans to have 1,000 dealers by January, its current number is a fraction of the subscribers of other Internet buying services.
Auto-By-Tel, of Irvine, Calif., has about 2,000 subscribing dealers, according to President Pete Ellis. AutoVantage, of Houston, has 1,000 dealers. AutoWeb Interactive Inc. of Santa Clara, Calif., boasts 1,100 dealers.
'There's a difference between claiming national coverage and actually doing it,' said Payam Zamani, co-founder and vice president of sales and marketing for AutoWeb. 'We could send a lead to anyone in the U.S. just to say we have national coverage. But we are growing slowly to provide uniform service in the U.S.'
Microsoft would not disclose the price of participation. Auto-By-Tel charges startup fees of $2,500 to $4,500, as well as an annual renewal fee of $2,500 plus monthly fees ranging from $250 to $1,500.
Microsoft has entered an agreement with Dayton, Ohio-based Reynolds and Reynolds, a dealer computer vendor, to help match prospects with dealers. If CarPoint lacks coverage in a market, Reynolds will intercede, contacting dealers in the area to fill the request.
'We have done business with over 95 percent of the dealers in the country already. It's a natural for us,' said Jeff Wise, vice president of electronic commerce for Reynolds.
Reynolds has an Internet marketing site for dealers called DealerNet, which lets dealers promote their stores, offer credit applications and finance programs, and display inventory online. DealerNet has about 1,300 subscribers.
Microsoft plans to offer credit application and finance programs over the Internet later this year.
The move to start another auto buying service represents a shift in philosophy for Microsoft, which dropped the Auto-By-Tel program from its Web site last week. Microsoft wants a comprehensive, self-contained automotive site under the CarPoint umbrella.
BUYERS GET A CHOICE
The company intends to offer consumers a choice of a few dealers instead of offering subscribers exclusivity in a market as Auto-By-Tel does. In other ways, CarPoint's service resembles Auto-By-Tel's in that it fields purchase requests from Web surfers and sends requests to dealers, who are to respond in 48 hours with a no-haggle price.
Auto-By-Tel had a three-year contract with Microsoft to offer its auto buying service on CarPoint, said Ellis.
Said Sparks: 'We have a difference in philosophy (with Auto-By-Tel). The consumer should not need to jump out to another user interface to find additional information.'
But Ellis said that Auto-By-Tel's traffic suffered because of its link with CarPoint, and that he initiated discussions about ending the marketing alliance earlier this year.
Ellis said he has not lost dealer subscribers to CarPoint.