AutoTrader.com, an online used-vehicle classified service, and eBay, an Internet marketplace, have combined forces to create an auction-style Internet site where consumers and dealers can buy and sell used vehicles.
The new site, www.ebay-autotrader.com, debuted Tuesday, March 7. Both companies will continue to maintain their separate sites that contain links to the combined site.
Chip Perry, AutoTrader.com CEO, said the new site exposes eBay's 10 million buyers and sellers to AutoTrader.com's 1.5 million vehicle listings from 40,000 dealers and 250,000 consumers. Perry said 5 million different users click on AutoTrader.com's Web site a month.
Perry said the goal of the venture is to provide a practical way for consumers to buy and sell used cars and trucks. He said eBay is the logical partner to make that happen.
'They (eBay) have the expertise, the technology, the brand name and credibility to operate a high-volume complex online auction,' he said. 'It's a skill set we didn't have.'
Brian Swette, eBay COO, said he believes consumers enjoy buying vehicles online in an auction format.
The site is open to consumers and dealers. Perry said the site will become a powerful, low-cost tool for dealers who want to sell used vehicles to consumers. Using a credit card, the seller pays $25 to list a vehicle and another $25 when a vehicle is sold. The buyer pays no fee for using the site.
Perry said consumers and dealers who contact AutoTrader.com about listing a vehicle for sale have the option of listing the vehicle on either the AutoTrader.com site or the new combined site. The AutoTrader.com site is a classified listing.
He said AutoTrader.com is working on a program that will allow vehicles listed on the new site to be simultaneously listed on AutoTrader.com's site with an icon that labels it as an 'auction' vehicle. When a user clicks on the icon, he or she will be linked to the vehicle listing on ebay-autotrader.com.
Both companies will oversee the development of the site and pay for a co-branded marketing campaign, Perry said. EBay is managing the technical operation of the site and is in charge of customer service.
EBay made a cash investment in AutoTrader.com. While neither company would disclose the financial terms of the agreement, Perry said Manheim Auctions Inc., which founded AutoTrader.com, remains the site's majority owner.
Other AutoTrader.com investors are Landmark Communications Inc., a publishing company in Norfolk, Va.; ADP Dealer Services Group of Hoffman Estates Ill., a division of Automatic Data Processing Inc.; and Kleiner Perkins Caufield & Byers, an Internet venture-capital firm in Menlo Park, Calif.