Greenlight.Com - Attracted The Interest Of Large Dealers

Greenlight.com was formed in 1999 and launched in January 2000 by Asbury Automotive Group, based in Conshohocken, Pennsylvania, and the venture capital firm Kleiner Perkins Caulfield & Byers with about $15 million in venture capital. Kleiner Perkins Caulfield & Byers had participated in the launch of such Internet giants as Amazon.com and Netscape Communications. With more than 70 dealerships in 10 states and some $4 billion in annual revenue, Asbury Automotive Group was the largest privately held dealership chain in the United States. For the Greenlight.com service, which had its headquarters in San Mateo, California, the company was seeking to sign up more dealers that had multifranchise coverage in major markets and that were comfortable using the Internet for business.

In its first month of business Greenlight.com struck a deal with Amazon.com. For an undisclosed amount, Amazon.com took a five-percent interest in Greenlight.com. Under a marketing agreement between the two companies, Amazon.com would receive $82.5 million over five years for promoting Greenlight.com to its customers. At the time Amazon.com had about 16 million customers.

Greenlight.com gained important credibility among automobile dealers when Joel Manby, former CEO of Saab Cars USA Inc., joined the firm as its president in April 2000. Manby's immediate goals were to build a committed network of dealers and to gain the support of the major automakers. Dealers were offered the opportunity to take an equity stake in Greenlight.com. One of the first dealer groups Manby signed up was Sonic Automotive Inc. of Charlotte, North Carolina, which operated 110 dealerships and had a large presence in the Southeast, California, and Las Vegas. It would take about six months for all of the Sonic dealerships to be set up for Green-light.com referrals. Meanwhile, the large auto-makers—including Ford Motor Co.'s Ford Division and Lincoln Mercury—were opposing services like Greenlight.com 's by threatening their dealers with severe penalties if they sold new vehicles to Internet brokers for resale.