Autoweb.com, an online buying referral service, and CarsDirect.com, a direct car-buying site, will create a direct new car-buying service on Autoweb's site this summer.
Consumers will be able to research makes and models and locate local dealerships through Autoweb's member dealership network. Customers who can't locate a particular model or a local dealer through that channel will be referred to CarsDirect, where they can configure and purchase the car online, Autoweb's chief executive officer Dean DeBiase said.
Under the terms of the agreement, Autoweb dealers can participate in the new direct service by joining the CarsDirect Priority Dealer Network. Similarly, dealers in the CarsDirect.com network can join the referral buying program by becoming Autoweb Quality Member Dealers.
"By leveraging our complementary strengths, we are able to broaden our consumer offerings more rapidly and cost effectively," DeBiase said.
Autoweb will be the only referral buying option of CarDirect. The company's customers will be able to link to Autoweb to list their used cars for sale.
The alliance includes the agreement to take equity positions in both companies. Autoweb will invest about $10 million in CarsDirect, while CarsDirect will buy $8 million in Autoweb stock.
Autoweb also announced today that its first quarter results are expected to be better than originally anticipated.
The company said that revenues are expected to be between $14 million and $15 million, approximately 5 percent to 10 percent above its original estimates. First quarter losses are expected to be at least 25 percent below the company's original estimates. The company expects net losses to be less than $9 million and roughly in line with fourth quarter 1999.