AutoConnect.com and Auto Trader Online Will Combine To Create World's Largest Used Car Web Site Company
20 July 1999
AutoConnect.com and Auto Trader Online Will Combine To Create World's Largest Used Car Web Site Company Database to Feature 1.5 Million Used Cars And Combined Reach
Of 2.5 Million Visitors
ATLANTA and NORFOLK, Va., July 19 -- AutoConnect.com and Auto
Trader(R) Online announce today a merger of their Web sites -- the two largest
used car Internet companies on the World Wide Web.
AutoConnect.com is owned by Manheim Auctions, Inc., a subsidiary of Cox
Enterprises, Inc. and by Automatic Data Processing, Inc. (ADP);
and Auto Trader Online is owned by Trader Publishing Company, a joint venture
of Landmark Communications, Inc., and Cox.
The new independent Internet company will operate under the name
AutoTrader.com (http://www.autotrader.com ). To be launched this fall, the new site
will be far-and-away the world's largest used car, truck, van, and sports
utility vehicle site on the Internet.
AutoTrader.com will specialize in the used automotive category, which is
considerably larger than the new car business, both in volume of vehicles, and
in economic value in sales. When the AutoTrader.com site launches, it will
provide consumers access to more than 1.5 million used cars and trucks, the
world's largest automotive database, giving consumers the most comprehensive
source for online automotive shopping.
Dealers and private party sellers will continue to supply the inventory of
the site. Currently, AutoConnect.com hosts listings for more than
32,000 automobile dealers and Auto Trader Online includes used car inventory
from over 18,000 dealers and more than 120,000 individuals.
Based upon verified consumer traffic to the current sites, the companies
anticipate the new merged AutoTrader.com will have more than 2.5 million
unique visitors each month.
Trader Publishing's automotive classified publications are distributed in
more than 136,000 retail outlets with an estimated weekly circulation of
2.5 million copies. AutoTrader.com will be heavily promoted in all of these
magazines.
"This is truly a monumental deal that benefits both consumers and
dealers," said Dennis Berry, president and chief executive officer of Manheim
Auctions, Inc. "By combining AutoConnect.com, Auto Trader Online and
AutoMart.com , AutoTrader.com offers the preeminent used car and used truck
shopping site. No other site can match the inventory, services and dealer
relationships we bring to the consumer or the targeted marketing and
advertising opportunities afforded to dealers, private sellers, and car
manufacturers."
Consumers will be able to list their cars for sale on the newly formed
AutoTrader.com free of charge. In addition, the advertised cars in Trader
Publishing's print publications will continue to be posted on the Internet for
free through AutoTrader.com .
"The merger represents an expanded promotional opportunity for all who
advertise their vehicles in our magazines such as Auto Mart(R) and Auto
Trader(R)," said Conrad M. Hall, president and chief executive officer of
Trader Publishing Company. "Their automotive photo and line ads will now
reach almost twice the audience of used car shoppers on the web -- by far the
largest automotive Internet marketplace."
Company Background
AutoTrader.com will be headquartered in Atlanta, Georgia. Victor "Chip"
Perry, current president and chief executive officer of AutoConnect.com , will
lead the company. Until the merger is complete and the AutoTrader.com site is
fully functional in fall 1999, AutoConnect.com , Auto Trader Online,
AutoMart.com and Pickup & SUV Trader Online will operate as separate entities.
Trader Publishing's http://www.traderonline.com will continue to operate its market-
leading Web sites for collector cars, RVs, boats, motorcycles, airplanes, big
trucks, heavy equipment, and general merchandise independent of AutoTrader.com
Distribution Deals
Following the merger, all of AutoConnect.com's multi-million dollar
Internet distribution relationships will be transferred to AutoTrader.com .
Currently, AutoConnect is partnered with three America Online properties
(AOL, AOL.COM, and CompuServe), @Home, two Lycos properties (Lycos.com and
HotBot), Snap.com, WebCrawler, Yahoo! and Cox Interactive Media's network of
local city sites. Under the agreement, AutoTrader.com will be the exclusive
consumer-oriented Internet host of Trader Publishing's automotive print
listings.
Revenue Model
AutoTrader.com will generate revenue by providing a comprehensive set of
dealer Web sites and online advertising solutions, national advertising
services and e-commerce services for financial, insurance and warranty
institutions. AutoTrader.com will assume the sole responsibility for
servicing dealer Web sites and Internet advertising deals currently residing
at AutoConnect.com and Trader's automotive sites. The site will also maintain
AutoConnect.com's open network of dealers, which allows dealers free used car
and truck listings with no exclusive, binding contracts, thus providing the
consumer with the largest possible selection of cars in their area.
The Market
In terms of volume, used cars now outsell new ones by a margin of four-to-
one and represent nearly 80% of the retail automotive market. According to
the National Automotive Dealers Association (NADA), some 41 million used cars
worth a collective $370 billion were sold in the U.S. in 1998. This compares
with 10.5 million new cars worth $303 billion.
More than 64 million adults, or about a third of the population over
18, go online in an average month, according to a recent Mediamark Research
survey. The report showed the number of U.S. adults with access to the
Internet -- either at home or work -- has climbed 16.3 percent in 1999, to
83.7 million, up from 53.5 million last year.
About Manheim Auctions
Founded in 1945, Manheim Auctions, Inc., (http://www.manheim.com ) is the world's
largest operator of wholesale automobile auctions with 87 locations in North
America, the United Kingdom and France. In 1998, Manheim offered for sale
more than 6.5 million vehicles. The actual value of vehicles sold was in
excess of $36 billion. Manheim is a leader in automotive Internet commerce
as a supplier of web sites and transaction services to auto remarketers. In
1998, the value of vehicles sold via Manheim's wholesale CyberLots totaled
more than $216 million. Manheim also provides vehicle reconditioning and
certification, an Internet-based vehicle value guide, dealer floor plan
financing, dealer business software and government auction services. Manheim,
along with the Dealer Services Division of Automatic Data Processing (ADP),
launched AutoConnect.com in May 1998. In thirteen months, AutoConnect has
grown to become the world's largest source of used car classified advertising
(http://www.autoconnect.com ).
Manheim is a subsidiary of Cox Enterprises, Inc. In addition to Manheim,
Cox includes Cox Newspapers, Inc., Cox Broadcasting, Inc., and publicly traded
Cox Communications, Inc. and Cox Radio, Inc. . Cox
Enterprises also provides online news, information and entertainment services
via the Internet through Cox Interactive Media.
About Trader Publishing Company
The Norfolk, VA-based Trader Publishing Company publishes a network of
weekly magazines serving more than 80 percent of the U.S., including 177 paid
photo guides, 24 classified ad publications, 119 free distribution
publications, and 14 monthly national publications. Most of its publications
contain advertisements for motor vehicles, boats and other items with each
containing a photograph of the item being sold. Trader has approximately
1.3 million weekly paid circulation and 3.1 million weekly free distribution.
Trader employs almost 6,000 people in field offices in over 100 U.S. cities.
Started in April 1996, Trader's Internet services include
http://www.traderonline.com and http://www.dibit.com , each of which offers
Internet shopping services for buyers and sellers of used vehicles and new and
used general merchandise. With annual vehicle listings from more than
2 million consumers, Auto Trader Online is the Internet's largest and most
significant consolidation of private party used car ads. Trader is owned by a
50-50 partnership of Cox and Landmark Communications, Inc. Landmark is a
diversified media company based in Norfolk, Virginia with holdings in
newspapers, television stations, specialty publications and other interests,
including The Weather Channel, a National Cable Television Programming
Service.
About ADP
ADP Dealer Services Group provides turnkey solutions to over 18,000 auto
and truck dealers throughout the United States, Canada, Europe, Asia and Latin
America. ADP Dealer Services Group is the third largest business unit of
Automatic Data Processing, Inc. (ADP), which with over $5 billion in revenues
and more than 425,000 clients, is one of the largest independent computing
service firms in the world. More information on ADP and ADP Dealer Services
Group is available via the Internet at http://www.adp.com .
About AutoConnect.com
AutoConnect (http://www.autoconnect.com) is owned by Manheim Auctions,
Inc., a subsidiary of media giant Cox Enterprises, and the Dealer Services
Group of Automatic Data Processing, Inc. and offers Internet shopping
information and services for pre-owned and new cars and trucks. Manheim and
ADP provide a variety of products and services to a combined total of more
than 90 percent of U.S. automotive dealers, making AutoConnect the Internet's
largest and most significant consolidation of automobile dealer relationships
and used car listings. The site opened to dealers and consumers in May 1998.
AutoConnect / Auto Trader OnLine Automotive at a Glance
June 1999 AutoConnect Auto Trader OnLine
Vehicle Listings 950,000 525,000
Unique Visitors 1,560,000 1,700,000
For Sale by Owners 2,916 125,000
Listing Dealers 32,000 18,000
