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CarPoint to crib local ad dollars

Microsoft's CarPoint adds new auto shopping features that could put greater pressure on newspapers looking to keep their lucrative advertising revenue.

Microsoft's (MSFT) CarPoint has added new auto shopping features today, which could put greater pressure on newspapers looking to keep their lucrative advertising revenue.

CarPoint's New-Car Buying Service lets visitors get a free quote from 500 dealers within 48 hours by filling out an online form. Users can also compare retail sticker prices with factory prices for all new vehicles sold in the United States.

Microsoft's move will no doubt threaten newspapers' grip on local online classifieds. It could also depreciate the value of print ads sold to local car lots and dealers, who might buy into CarPoint's promise to drop customers on their doorsteps.

CarPoint has already racked up 200,000 visits today, up from the average 30,000 a day it received before adding the new quoting service.

Although the monthly membership fee varies by the size of dealer or franchise, it costs up to $1,500 a month to become a member. In return, CarPoint, along with Reynolds and Reynolds, handle the administration of car quotes. "The price quoted will be the most competitive price the dealer can give, period. Customers will not have to haggle," promises CarPoint, which will add will add 500 more dealers by January.

CarPoint expects the Net to help dealers close sales. "In general, dealers close 20 to 25 percent of their sales. We think for an Internet user, they'll see close rates of 30 to 35 percent," said Alex Simons, product manager for CarPoint. "Someone who's come through CarPoint has done all the research and won't have to visit all these dealers. [Users] can also save $2,000 to $4,000 because they can use the invoice-pricing information."

The service says it will refer customers to another dealer if a CarPoint member doesn't respond on time and possibly drop the business from the program for failure to follow its guidelines.

Many newspapers have developed huge areas on their sites dedicated to automotive content and its related advertising. CarPoint's membership fee is often lower than the monthly banner ad rates at newspapers.

Newspapers usually guarantee thousands of hits for a set price. For example, the Boston Globe's site has an auto section. The site's ad rates range from $3,500 for 100,000 impressions to $60,000 for 2 million impressions.

The Sacramento Bee has the 4wheels shopping areas. For one month, it charges $1,000 for 25,000 impressions. In addition, advertisers can pay for a month of rotation through a popular section such as $2,550 in the daily news area.

But CarPoint touts its ability to document the actual people who contact the dealer and buy. The service's dealers can also keep the names of people who inquire about cars to market directly to the person.

However, dealers can't sell or give the names to a third party, according to Simons. But there is no policy posted on the site about how visitors' names, address, phone numbers, and car preferences will be used.