Microsoft upgrades Ford sales website

The agreement announced yesterday upgrades Microsoft's CarPoint Website so that users can have their orders matched with cars in dealer lots, in distribution centers or even on the factory floor.

Once a customized car is complete, the Website user would be referred to a dealer, who would negotiate the price and deliver the car.

"CarPoint is going to change the way cars are bought and sold with technology that brings together manufacturers and dealers to deliver the services consumers want," said Microsoft President Steve Ballmer.

Ford would not sell cars directly online, which is forbidden by franchise laws. Sales would be completed through franchised dealers, who would make the profit on the transaction.

"The consumer is driving a revolution in automotive retailing, and Ford intends to be at the forefront of that revolution," Ford CEO Jacques Nasser said.

Microsoft and Ford's industry dominance gives CarPoint an edge among the growing array of online car-buying services, such as AutoNation and Autobytel, which also refer customers to dealers but don't have alliances with manufacturers.

"These are two important fixtures in electronic commerce and in our industry - that's what makes it significant," said Paul Taylor, chief economist for the National Automobile Dealers Association in McLean, Va.

Nasser said he called Microsoft CEO Bill Gates about five months ago to propose the joint project. He ended up speaking with Ballmer, who warned him that "e-commerce works in high speed, so be ready to move quickly."

"Four weeks later I called and said I'm ready to move, and now four months later here we are," Nasser said.

Ford will take a minority stake in the joint venture with CarPoint and will be Microsoft's lead partner. Microsoft said it expects other automakers to also become involved.

Automakers are seeking ties with technology companies to streamline distribution systems, reduce costs and inventories and gain access to online consumers. "It's a defensive as well as offensive tool for the customer," Taylor said.

Consumers with the patience and know-how to do their own research can have more control over the price by using a variety of different Websites to learn exactly how much it costs dealers to put together the car they want. Armed with this information, they can go to dealers themselves and make them compete with each other to sell them their ideal car.

The Web also has virtual dealerships, such as CarsDirect.com, a venture backed by computer executive Michael Dell that obtains cars from its dealer partners at wholesale prices and sells them to consumers online.

But Taylor doesn't consider brick-and-mortar dealerships to be endangered.

"The vast majority of customers still rely on the dealer for delivery of the car, service, information and follow up, and that makes the purchase of a car somewhat different," he said.

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