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Autoweb buys info service
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September 22, 1999: 6:19 a.m. ET
Thomson unit gives auto sales Web site more content to draw consumers
By Staff Writer Chris Isidore
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NEW YORK (CNNfn) - Autoweb Inc., one of the leading automotive e-commerce companies, Wednesday announced the purchase of the Automotive Information Center (AIC), an automotive industry database service, from Thomson Corp. for $16 million in cash and stock worth about $4 million.
AIC will continue as a separate operation under its current management, according to Santa Clara, Calif.-based Autoweb (AWEB ).
AIC will serve consumers using its AutoSite Web site and those who will now access the data at the Autoweb site. It also will continue to provide data to auto manufacturers, media and Internet portals that use the service for analysis and content.
"To be the best automotive research and decision-making site, Autoweb.com needs to offer consumers the best database and tools," said Dean DeBiase, Autoweb's chairman, chief executive and president. "We believe AIC has both."
DeBiase said that AIC is a profitable operation on its own.
The move comes as new attention and resources are being devoted to the world of automotive e-commerce.
On Monday, Ford Motor Co. (F ) announced it had taken an unspecified stake in CarPoint, the online auto buying site of Microsoft Corp. (MSFT ).
Autobytel.com Inc. (ABTL ), a key competitor of Autoweb, in July announced plans to purchase privately held W.G. Nichols, publisher of the highly respected Chilton series of automobile repair manuals. That deal was worth $13 million in cash and stock worth about $3.7 million at current prices. It has yet to close.
Officials with both Autobytel.com and Autoweb.com say strong site content is important to attracting consumers to their sites.
"Our customers are telling us 'I don't want to search the whole Web to do research,'" said DeBiase. "With AIC, we literally can do anything consumers want."
But the key to profitability at the companies, which have yet to post profits, is for consumers to use the sites to purchase cars. Most of the revenue for the sites, which are still not making money, comes from referral fees paid by dealers to whom consumers are referred, or from fees on vehicle purchases that the sites handle more directly.
An estimated 40 percent of car buyers now turn to the Internet for information or other help at some stage during their purchase, a figure that is expected to rise to at least 75 percent in the next three to four years.
Autoweb closed unchanged Tuesday at 9. 
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