Heavy Metal: GM, Ford Strike Internet Deals

Two of the world's largest automakers are teaming with two of the most popular Internet service companies in an effort to reach customers on the Web and in their cars.

General Motors Corp. inked a broad-ranging marketing agreement Sunday with America Online Inc. On the same day, Ford Motor Co. announced a similar deal with Yahoo Inc.

The deals with two of the 'Net's most successful mass-marketing machines mark a significant move to tap into the broadest possible pools of potential car buyers, reaching beyond the automakers' own Web sites and specialty auto sites.

Financial terms were not disclosed.

GM's alliance allows promotion of its cars to AOL's 20 million online users, and will provide AOL content in certain Cadillac cars later this year. GM executives were especially upbeat about the deal in light of AOL's US$166 billion merger Monday with Time Warner.

"The merger between AOL and Time Warner is going to dramatically extend the reach of the deal we have," said Mark Hogan, president of eGM, the company's e-commerce unit. He added that the AOL deal and other possible portal agreements are expected to increase by tenfold the number of Web site referrals to GM dealers.

Ford's deal with Yahoo gives the portal's auto section a range of personalized information about Ford cars such as owners' manuals and maintenance logs. Car owners may someday be able to schedule maintenance visits to local dealers through Yahoo. Separately, Ford announced that it will be providing Internet access in some of its Lincoln vehicles in September.

The marketing agreements and Web-enabled cars are only part of the automakers' evolving e-business strategies. The really big money is on the business-to-business side of their operations, and both GM and Ford are racing to build online exchanges where they can buy supplies and materials.

Both firms spend $90 billion a year on those items, and hope the fledgling exchanges will reduce costs by 10 percent. But executives admit that the industrial giants are just beginning to figure out how to use the Net to do business with their thousands of suppliers.

Says Hogan:"People are just starting to get it."

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