If all goes according to plan, Autobytel.com Inc. will launch an initial public offering in late March or early April into a market that is greedily snapping up new issues of Internet stocks.
More important, the Autoby-tel.com offering will reveal what investors think of the company's World Wide Web retailing approach.
Autobytel.com actually is taking a second waltz down Wall Street. Its initial plan to sell stock to the public was canceled in the spring of 1997 when the market soured.
However, not much has changed for the online buying service, which is based in Irvine, Calif. It still is losing truckloads of money and is not saying when that might end.
Since it was founded in 1995, Autobytel.com has piled up losses of $39.4 million on accumulated sales of $47.9 million. In the first nine months of 1998, the company lost $15.5 million on revenue of $16.5 million.
The initial public offering is expected to raise $72 million. The company is scheduled to receive $56 million. Company founders Peter Ellis and John Bedrosian are scheduled to get $8 million each.
Last year, Ellis stepped down as chairman and CEO to make way for a new top management team. In June, the company appointed Michael Fuchs, former CEO of the Home Box Office cable TV channel, as its chairman. The same month, President Mark Lorimer, an expert on securities laws, was named CEO.
NEW GAME IN TOWN
Normally, a company with such a money-losing history would have a tough time on Wall Street. But this is, as they say, the new economy for the new millennium. And investors appear game.
'In the Internet space currently, the name of the game is to build a brand,' CFO Hoshi Printer said in an interview. 'And you have to be the first mover.'
The company says it currently has 2,386 paying dealers out of 2,718 participating. Dealers pay an initial sign-up charge and monthly fees under five-year marketing agreements, which may be canceled by either party on 30 days' notice.
In the first nine months of 1998, each of Autobytel.com's paying dealers paid the service an average of $6,915 - an annual rate of $9,220.
Autobytel.com said vehicle purchase requests routed through its system totaled 1.3 million in 1998, an increase of 71 percent. A purchase request is an online inquiry by a shopper for a price quote from participating dealers.
There are skeptics about Autobytel.com's prospects. Autobytel.com's business model - charging dealers monthly fees for sales leads - has yet to be proved, said Sheldon Sandler, CEO of Bel Air Partners LLC in Princeton, N.J., an investment firm that specializes in auto retailing.
'Car dealers aren't raving about what Autobytel does for them,' he said. 'But anything with 'dot com' sells today. Autobytel has this window to take advantage of circumstances in the marketplace.'
Competitive pressures are mounting fast, noted Chip Perry, president and CEO of AutoConnect. The Atlanta-based online buying service specializes in used cars and offers free leads and classified ads to dealers.
Perry would not disclose AutoConnect's financial results, but he did say the company also was losing money.
Manufacturers, he said, can be expected to move much more aggressively into online retailing, perhaps offering free leads to dealers. And then, he asks, what happens to Autobytel.com and others that are charging fees for those leads?
Although AutoConnect has no specific plans to go public, Perry concedes that the market for new Internet issues could not be better.
'Anything with 'dot com' the public is willing to buy,' Perry said.
Printer acknowledged Autobytel.com's formidable competition. Manufacturers, he noted, have not only extensive information about their own inventory but huge financial resources. But Autobytel.com has the advantage of independence and a perceived objectivity by consumers.
'We provide comparative (vehicle) data,' Printer said. 'And that's where I think the value is.'
In March 1998, Autobytel.com ranked first in J.D. Power and Associates' intitial survey of dealer satisfaction with the online buying services. AutoVantage of Stamford, Conn., was a close second.
Power, which is compiling a second survey, has seen 'strong improvements' in the service level of Autobytel.com's competitors in the last year, said Chris Denove, director of consulting operations for Power. Dealers also are embracing the medium in greater numbers.
The online services are learning that adding more software bells and whistles is not going to wow consumers. The key is making their services more useful. For instance, online buying services are adding more Web-based tools to help shoppers sift through the Web's massive amount of vehicle data.
'They've really taken a step back and made all these whiz-bang technologies more helpful to the dealers and consumers,' Denove said.
Who will be the winners in this so-called new economy based on Internet retailing? No one knows.
Howard Stringer, chairman and CEO of Sony Corp. of America, said in a speech last month in Las Vegas that roaming the World Wide Web to hunt down product information for purchases is 'only the first step in the progression of e-commerce, which will have many different incarnations before anyone actually gets it right.
'The rules just haven't been written yet.'
Staff Reporter Donna Harris contributed to this report