than 70 percent from their 52-week highs.
The sector has already begun a shakeout. In the last year, Autobytel acquired Carsmart; AutoNation (AN) paired with Autovantage and Carpoint bought Driveoff.com. Autotrader.com, meanwhile, partnered with eBay (EBAY), hoping to capitalize on eBay's traffic. New-car site Greenlight.com said recently it will pay Amazon.com (AMZN) at least $15 million over two years to appear on the retailer's homepage.
Carorder.com is simply transforming itself. It stopped taking orders for cars last month, saying it has secured additional financing that will let it re-emerge as a technology provider for auto dealerships.
Uncertainty in the sector has not scared off investors, however. Vulcan Ventures and the venture arm of Donaldson, Lufkin & Jenrette (DLJ) poured $62.5 million into iMotors, boosting the used-car site's plans to build automobile delivery centers in 34 markets, including Chicago, Detroit and Miami. Greenlight announced it received $39 million from both current and new investors, including VC firm Kleiner, Perkins, Caufield & Byers. Softbank is betting an undisclosed amount on Model E, a site that will launch in early 2001.
No one doubts more car buyers will turn to the Internet. Forrester Research says it expects that by 2003 about 8 million households will use the Net at some point during a car purchase, up from 2 million last year. But the real money will start flowing only when appreciable numbers of online browsers become online buyers.
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