In its second-largest acquisition, Amazon buys the company for $970 million.
The web-only mass merchant is selling off its travel unit, OTravel.com, after shoppers showed little interest in it as a source of travel bargains. But that doesn’t mean they won’t shop online for cars through its new O-cars program, CEO Patrick Byrne says.
Maybe the shoppers who visit Overstock.com would simply rather drive themselves. The online-only mass merchant is selling off its travel unit, OTravel.com, after shoppers showed little interest in it as a source of travel bargains. But that doesn’t mean they won’t check Overstock’s pages for cars to buy, says Patrick Byrne, CEO of Overstock.com Inc.
Through its new O-Cars program, Overstock will display selections of vehicles on behalf of car dealers, who pay from $650 for up to 60 car listings in a single month, to $1,600 per month for 61 or more vehicles listed over a 12-month period. One client Overstock has announced is Enterprise Rent-A-Car, which will begin listing cars from inventory kept at 175 sales locations.
The O-Cars program will work with auto dealers from across the country to list new and used vehicles, Byrne says.
“We’ve set up the O-Cars program in such a way that dealers receive instant text-messaged leads directly from consumers,” he says, noting that Overstock gets up to 15 million visitors every month. “This means that a dealer can actually be in touch with an interested consumer within 30 seconds of a buyer’s expression of interest.”
Interest in Overstock’s OTravel.com subsidiary, however, never quite took off after Overstock acquired the travel services business from Ski West Inc. in 2005 for $25 million. Overstock has entered a non-binding agreement to sell the travel unit to an undisclosed party. OTravel focuses mostly on offering discount travel packages to ski areas in the U.S. and Canada, but recently expanded into travel packages for cruise ships and destinations in the Caribbean and Mexico.
Overstock reported a loss from discontinued operations at OTravel.com of $6.9 million for the year ended Dec. 31, 2006, including a goodwill impairment charge of $4.5 million. Goodwill is an accounting measure of the value of a business in terms of intangible assets such as customer patronage and reputation.