It has been two decades since a wave of startups first promised that e-commerce would revolutionize how we buy cars. For proof, one must only dust off a VHS tape of the 1997 Super Bowl, when Autobytel became the first dot-com startup to buy an advertising slot during America's most-watched TV broadcast.
Autobytel's cartoon commercial, which has been repeatedly added to lists of the worst Super Bowl spots of all time, even boasted a voice-over from Leonard Nimoy, best known for playing the hyperrational starship officer Mr. Spock on "Star Trek."
"From the beginning of time, people wondered," Nimoy intoned. "Why does car-buying have to be such a pain?" He suggested that Autobytel would cure that pain by making it possible to buy, lease, finance and insure a car online.
In the frothy early days of the Internet, investors were throwing money at anything with dot-com in the name. Cars, as the second-biggest purchase for most Americans after a home, proved an irresistible target.
"Internet companies don't have to prove themselves," Sheldon Sandler, founder of the New Jersey-based auto-retail consultancy Bel Air Partners, told Automotive News in 1999. "All you have to do is put a "dot com' in your prospectus and you're a success," Sandler added, warning of the shakeout that would arrive the following year.
Autobytel, founded in 1994, had started out on Prodigy, a long-defunct online service, moving to the burgeoning World Wide Web in 1995. Over the next two years, it drew $24 million in capital and handled 575,000 requests to buy cars, Advertising Age, a sibling of Automotive News, reported at the time. It signed up 2,000 dealers, who paid $2,500 to $4,000 upfront, plus $2,500 annually and $500 to $2,000 per month.
There were many similar startups: CarsDirect.com, CarPoint.com, DealerNet.com. Most of them went out of business, but some, including Autobytel and CarsDirect, survived by scrapping their e-commerce dreams and building car-shopping websites. They still exist today, making money primarily by selling leads to dealerships.
A new breed of e-commerce startups, including Roadster, is now trying to ease the pains that Autobytel promised during its Super Bowl advertisement to cure. Only time will tell whether they live long and prosper, as Mr. Spock would have wanted.