Irvine-based Autobytel Inc. is looking to put the rubber to the road.
The auto marketing company, which has faced an investor rebellion, a buyout bid and a delisting threat from Nasdaq officials this year, is looking to generate more business from leads to auto dealers as it downplays revenue from advertising on its Web sites.
The goal is to pass along more names of shoppers who are ready to buy and aren’t just kicking the tires.
The company’s latest efforts are “really not focused on the general consumer but really on consumers who are in the market for a car,” Chief Operating Officer Mark Garms said.
Garms, Autobytel’s former senior vice president of dealer operations, was promoted in January as part of what was a larger management shakeup that started in late 2008.
A number of executives “resigned or were terminated,” Autobytel said in its annual report earlier this year.
Among those who left were former Chief Executive James Riesenbach and ex-financial chief Monty Houdeshell.
Jeffrey Coats, an Autobytel director and an investment and technology executive, was named chief executive in December.
Revenue from leads to dealers made up 85% of Autobytel’s $13.4 million in second quarter revenue, up from 43% in 2006.
The company buys leads from Irvine’s Kelley Blue Book Co., Santa Monica-based Edmunds Inc. and Silicon Valley’s Yahoo Inc., catering to busy dealers that don’t have time to gather leads from different sources.
Advertising by automakers and others on Autobytel’s Web sites was 13% of sales in the second quarter, down from 20% three years ago.
In 2007, former chief Riesenbach had sought to boost dealer advertising on Auto-bytel’s sites, which include Autobytel.com, Autoweb.com and Myride.com, by focusing on consumer research for auto shoppers.
The downturn in auto sales that’s played out in the past year likely doomed that strategy as dealers cut back on broad advertising.
Now Autobytel wants to help dealers generate more sales, building on the boost from the summer’s “cash for clunkers” federal rebate program.
The company has changed the makeup of its Web sites to include more auto industry news and less fluff, like stories about what celebrities are driving. It’s also boosted the ability of site visitors to directly interact with dealers as well as automakers.
The shift is designed to appeal to shoppers wanting to buy an auto within the next three months. Those folks are the ones dealers really want.
“Our goal was to make sure all of the information a serious buyer might need is available to make an informed decision,” said Rick Szatkowski, Autobytel’s executive vice president of advertising and business development.
Autobytel has seen more competition for the attention of online auto shoppers from Kelley Blue Book and others. Some of that’s good, according to Garms.
The company struck a pact with Kelley Blue Book in July to provide lists of used autos on hand at dealers for Autobytel’s sites.
The auto sales downturn has hit Autobytel hard. Sales for the second-quarter were down 30% from a year earlier.
Cost cutting helped narrow Autobytel’s loss to $251,000 in the second quarter, down from $57 million a year earlier.
Autobytel’s shares are off 40% in the past 12 months with a recent market value of $25 million. They’ve enjoyed a bounce this year with Wall Street’s larger comeback, rising about 15% since the start of 2009.
Past Value
But Autobytel is a shadow of its former self. The company peaked on Wall Street in 1999 with a market value of $285 million.
Last week, Nasdaq regulators warned Autobytel it could be delisted from the exchange if it doesn’t see its share price go above a $1 per share threshold.
In April, Autobytel’s board rejected an unsolicited $15.8 million buyout offer from a major shareholder, Infield Acquisitions Inc., part of Texas-based Trilogy Enterprise Inc.
At the time, the offer was 30% higher than what Autobytel’s shares were trading at.
In January, Autobytel struck a deal with Chicago-based activist hedge fund investor Clint D. Coghill that allowed him to buy more of the company in exchange for him not agitating for changes.
Along with strategic shifts, Autobytel is hoping an auto industry rebound will help revive the company.
“When you look at the auto industry, 2009 seems to be what will be the low point and with 2010, we’ll see improvement over 2009,” Szatkowski said.
