TrueCar - DealerTrack (ALG) Relationship: The words of a DealerTrack Employee

I received this email about eight hours ago from an employee of DealerTrack.  They asked me that I kept it discreet so I will not be mentioning who it was that sent this to me.  It is amazing that DealerTrack's own employees have certain opinions about DealerTrack selling ALG to TrueCar.  Does it mean that DealerTrack's own employees are against this deal too?  I know that I myself could not work for a company that would allow something like this (no matter how much money I was getting paid).  Anyway, here is the email with more inside information by someone whose name cannot be disclosed.  Friends, enjoy this as much as I did.

> So the press release reads "DealerTrack sells ALG to TrueCar."  Why would DT part ways with their most unique data brand, in an age where data rules all, you ask?  Well, actually they didn't.  In the "selling" of ALG, DT gets:  an equity stake in TrueCar, scores a seat on their board, receives a perpetual/royalty free ALG license, secures a multi year agreement to retain operating duties, and banks a very high stack of millions of dollars. What did they give up other than some future subscription revenue, of which they are going to share in anyway?
>
> This isn't a sell your dealership to AutoNation/take the money and run type of a transaction.  This is Pops handing off to Junior.  Son here's how we do it. This is nothing more than "let's just go ahead and transfer the title and put this thing in your name, wink."  DealerTrack had to have anticiapted the outcry of moving dealer data, and this was their way of staying off the battlefield.
>
> So why would TrueCar agree to such a one sided expensive deal?  Imagine all the financial and lender information that DT has access to, or the amount of data contained in the DT DMS (Arkona), imagine the number of credit applications submitted through their portal each day, the scanned deal jackets, the AAX inventory metrics, TriVin's electronic titles, etc... The amount of data is maddening, it's deafening.  But with every one of these keystrokes from  these modules and business units comes a corresponding digital imprint, an imprint that is filed and sorted, and sent to the DT data vault for future use.
>
> Welcome to the future.

> Many of us have seen A&E's Storage Wars where entrepreneurs will bid for access and ownership to the contents of storage lockers that are in default.  Invariably there is a guy in the back of the auction crowd with a funny hat that is always nodding his head and mumbling, "uh hum".  Let's call him Scott.  And Scott will do whatever it takes, at any cost, to get the keys. He just wants to go in and take a peek around.  Here's a check.
>
> And whether you think it's your data, or legally it's theirs, or you like the TrueCar business model or you don't, that's up for you to decide.  One thing is for sure, DealerTrack just made a truckload of money.

> Zig, meet Zag.

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Comment by Jae Chang on December 11, 2011 at 12:36pm

I was just thinking of the "E-Contract" data, but oh there is so much more. How does / will affect the "Dealers" who are submitting this data to lenders via DealerTrack? Are the Dealers indirectly exposing customers. This is now Truly Frightening!  

I will again mention;Will Transactional Data of an Employee Purchase ( way below cost ) be posted as "Best Price"??  

Comment by Keith Shetterly on December 11, 2011 at 12:23pm

There you go.  Many of us have discussed this transaction in just that way:  When TC/Zag says it "no longer needs DMS data" what it really means is that it found replacements/augmentations from other sources.  WELL, THE DEALER SOLD THE CAR.  SO, who's data is it really?  Does it matter that they got your business information directly from you or from your cousin?  DealerTrack, you're not off the hook now.  Not any more.  I doubt any of the folks involved in this expected the power of social media.  It can topple a government.  And it can stop this, if we keep pushing.  Essentially, DealerTrack sold it's daughter into marriage.  That's something Kings used to do in order to seal covenants and treaties and alliances--which should tell you all you need to know about this deal.  DealerTrack = TrueCar/Zag.  Think about that while you're putting your deals through these systems next week . . .

Comment by Stan Sher on December 11, 2011 at 12:22pm

Thanks.  This is a great piece.

Comment by Keith Shetterly on December 11, 2011 at 12:20pm

And, great work, Stan!!  And thank you to the TC employee who spilled the beans.  You've both got more guts than anybody at a high level in this deal.  Sick.

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