Internet automotive “pioneer” Autobytel.com announced a workforce reduction of a third of its employees today and that the auto sales marketing company formed in 1995 has hired RBC Capital Markets to assist the company in analyzing various strategic alternatives going forward.  This follows a 14% workforce reduction during the fourth quarter of 2007 as the company continues to figure out how best to position itself in the increasingly competitive online auto space.

In 2006, Autobytel announced it would start transitioning more towards a “media-centric advertising driven business model” from its lead-gen roots, selling two businesses in 2007 and one early this year to help refocus the company.  However, the strategy isn’t working with advertising revenues actually falling from $19.2m in 2005 to $16.9m in 2007.  This comes with the rest of its business still stuck in the increasingly unprofitable activity of converting expensive internet traffic into auto and finance leads.  But while Google continues to be the true winner here, Autobytel still sits on some valuable assets.  

Car.com anyone?

This entry was posted on Friday, September 26th, 2008 at 3:50 pm and is filed under Private Equity News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.