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 CompanyDatabase 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