Start-Up Aims to Connect Buyers to New Car Deals

BY TIM HIGGINS • FREE PRESS BUSINESS WRITER • March 23, 2008 —NeoSynergy, a start-up Internet company with its headquarters in Bloomfield Hills, is responsible for a new feature on AOL's auto page that allows users to search for the best deals on new cars and trucks.

NeoSynergy is a Web-based auto retail management, advertising and e-commerce company that has about 35 employees and plans to double that number within the next nine months.

The company launched its Best Deals product with AOL -- www.autos.aol.com -- last November and has begun signing up dealers to advertise through the system.

Car shoppers can compare deals on new cars, and advertising car dealers can change their offerings to better compete in the marketplace.

Best Deals pulls information from two sources: The company finds advertised deals from dealers in the top 50 auto markets in the country, placing the information into a searchable database that car shoppers can use to compare rates. In addition, the company sells advertising space to dealers, allowing them to post their rates to meet changing market demands.

The cost to an advertising dealer is $500 a month per franchise; the company had signed up 200 dealers within 45 days with the goal of having 4,000 by the end of the year, company officials said.

A Niche on Net

NeoSynergy sees a niche for itself in a competitive e-commerce world. "There is nowhere on the Internet today that you can go and find the lowest published price that you can find a vehicle for," said Lance Tebay, NeoSynergy executive vice president and COO.

The company also plans to launch a Web-based service called Buy Direct this summer that will allow customers to purchase or place a refundable deposit on vehicles advertised through the system.

"It's ready to launch but you need to have critical mass to make sure the consumer experience is appropriate. So we will be launching that in the second quarter once we get the top 12 brands in the top 35 markets or roughly 700 to 1,000 dealers in the advertising product," Tebay said.

The company is in talks with other Web portals about potential partnerships similar to what it has with AOL. "We are open to integrating Best Deals and Buy Direct into other shopping Web sites or directly on dealer Web sites (larger dealer groups have expressed interest in this)," Patty Cox, NeoSynergy's chief marketing officer, said in an e-mail.

NeoSynergy merged with MotorAlley.com last year.

The two companies began with a combined $10-million investment and expect to grow their $2 million in revenue last year to much more, company officials said.

"Best Deals attracts consumers that are looking for a discount or special deal on a new car," said David Wassmann, NeoSynergy president and CEO. "Buy Direct will take consumers from the actual finding of the deal to actually offering them the opportunity to hold that deal and purchase it."

As part of the company's vision of better linking dealers with customers via the Web, NeoSynergy also is marketing a Web-based dealer-management system called DARWIN XE for dealers to help manage inventory. NeoSynergy has signed an agreement with PEQ Consulting Inc. of Miamisburg, Ohio, for installation, training and other assistance.

Contact TIM HIGGINS at 313-222-8784 or thiggins@freepress.com.