Automotive News - February 4, 2008 - (Page 50) 50 • FEBRUARY 4, 2008 The online dealer INSIGHT Visionary dealer launched online shopping Donna Harris dharris@crain.com B ack in 1994, Seattle auto dealer Marty Rood uploaded a photo of a 1993 Volvo 850 GLT to his dealership’s fledgling Web site. Adding the image of the Volvo was an initial step toward the virtual showrooms that Web users have come to take for granted. Rood’s site soon evolved into an Internet portal called DealerNet, the first online shopping service for cars and trucks that was linked to local dealerships. Today, two out of three new-vehicle buyers use the Internet when they shop, J.D. Power and Associates reports. But back then, Rood was a pioneer in largely unknown territory. “Customers had to get brochures of cars from dealers and had to go into their stores,” Rood recalls. “Now they can simply go online.” Rood sold his Nissan-Volvo dealership in 1995, when he realized that the Internet was on the verge of a retail boom — and that he wanted to help lead it. Today, Rood says of his groundbreaking online work, “Someone else would have done it if I hadn’t.” But he is proud to have been in the forefront of what he calls a “paradigm shift.” Peter Wilson, senior manager of MSN Autos, an automotive Web site operated by Microsoft Corp., says Rood “pioneered the automotive retail online space.” “As soon as he realized what the Internet could do for automotive retail, he went online,” says Wilson, the first employee Rood hired for DealerNet. “Then we started building Web sites for other stores. “Marty is a very driven person. He doesn’t take ‘no’ for an answer.” DON WILSON Marty Rood’s early Web site evolved into DealerNet, the first online shopping service for cars and trucks that was linked to local dealerships. Rood said he appreciated the gesture: “I didn’t want to be the dealer’s son who inherits the business. I wanted to do my own thing.” That year, Rood used his share of the proceeds from the dealership’s sale, along with a $150,000 loan from his father, to buy a Nissan-Volvo dealership in the Seattle suburb of Lynnwood, Wash. Marty Rood Age: 53 Founder: DealerNet, first online vehicle-shopping service linked to dealerships Pioneered: Dealership Web sites, dealership search engine marketing, online vehicle credit application, searchable usedvehicle database Former dealership: Rood NissanVolvo, Lynnwood, Wash. Current business: Commercial real estate broker Quote: “We knew the Internet would be huge.” ing Google big money to have their name and Web site pop up on the page.” 10-foot stand Within a year of its launch, DealerNet had attracted about 20 dealer affiliates. It also had several competitors. But by then, Rood’s site had become a well-recognized Web brand. “It was a household word for those on the Internet,” Rood said. “We knew the Internet would be huge in terms of the volume of information on it. How was the consumer to find a dealer, once they built their home page and Web site? DealerNet was the answer.” At the National Automobile Dealers Association’s 1995 convention in Dallas, Rood had a 10-foot-long booth on the show floor that demonstrated DealerNet. Visitors mobbed the display — including executives of Reynolds and Reynolds Co., the leading provider of dealership management systems. Reynolds liked the idea of linking its 8,500 dealer customers to DealerNet’s searchable used-vehicle database, Rood said. He agreed to sell DealerNet’s parent company, Dealer Internet Service Corp., to Reynolds and Reynolds for $3 million in Reynolds stock. By early 1996, DealerNet was recording 6.5 million user visits a month. Under Reynolds’ ownership, Superhighway on-ramp A few years later, Rood read an article in Popular Science that described an innovation called the “information superhighway.” Intrigued, Rood paid $50 to attend an Internet seminar at the University of Washington in late 1993. “My parts manager probably knew more about computers than I did,” he said. At the seminar, Rood met an employee of a company called Spry, which loaded software on a customer’s computer and connected it to a phone line. Spry called the online access “Internet in a box.” At first, Rood planned to work with Spry to create online displays of his dealership’s inventory. But then he thought: Why not use the Internet to offer information about every automaker’s vehicles and a way to buy them? With a $400,000 investment, DealerNet was born. Rood worked with Chrome Data Born inventor Rood, 53, has both inventiveness and auto retailing in his blood. His grandfather’s cousin, Ole Evinrude, an early developer of the outboard motor. His father, Stan Rood, was among the first dealers to use computers for accounting. Marty Rood started washing cars at his father’s Seattle Buick dealership when he was 6. From his father, he learned salesmanship — such as the tactic of giving ice cream to customers. “What are they going to do when they are handed the ice cream?” Rood told Automotive News. “The only place they could go was home, because it would melt. They couldn’t go shop our prices” at competing dealerships. When Stan Rood retired in 1984, he sold the dealership — which had added a Pontiac franchise — rather than transfer it to his son. Marty Corp., of Oregon City, Ore., to maintain a database of vehicle specifications. He charged dealers $10,000 to $14,000 to build Web pages for their stores and link them to DealerNet. At the same time, DealerNet added a searchable database of used vehicles available for purchase. Through Spry and an early Internet search engine called WebCrawler, DealerNet also helped pioneer search engine marketing. Spry and WebCrawler both provided prominent user links to Rood’s company. “This business model has never changed since its inception,” Rood said. “Look at Google today. You type in something, get results, and the results are sponsored by someone pay- DealerNet helped automakers as well as dealers create Web sites. It also developed an online credit application system for General Motors Acceptance Corp., now GMAC Financial Services. In 1997, Reynolds sold the DealerNet name to Cobalt Group, an online auto marketing company in Seattle. Using DealerNet’s technology and processes, Reynolds worked with Microsoft to help the software giant develop Microsoft CarPoint, which became MSN Autos. Later that year, Rood left Reynolds in a dispute over royalties. More than a decade later, under Cobalt’s ownership, DealerNet remains a major vehicle-shopping portal featuring thousands of dealerships. Rood now works mostly outside the auto industry. He formed a company that allows a business to confer immediately with visitors to its Web site. Its clients include a few auto dealers. Rood also recently bought a commercial real estate brokerage in Seattle. He continues to reflect fondly on his days as a pathfinding online dealer. “Sometimes we are better at creating things when we’re a little hungry,” Rood said. “That’s the environment I was always in. I had to work my tail off. “A part of me says I wish I had it a little easier, but the other part of me says I am a lot sharper because I had to go through that.” c Get a Free Diagnosis of Your Dealership at www.mightycure.com ! tter l be 00 ee -39 ’ll f You 0-829 … -80 1 l us Cal …or… Visit us at NADA Booth 3239W The Automotive Dealership Specialists http://www.mightycure.com http://www.mightycure.com
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