By Julian Matthews
January, 17, 2001
Asianauto.com slams brakes
KUALA LUMPUR, MALAYSIA, JAN 17, 2001, ZDNet
Motoring portal slashes some 30 staff from its payroll and re-prioritizes print magazine over online venture.
Asian Auto Interactive Sdn Bhd, partly-owned by public-listed Delloyd Ventures Bhd, is backpedalling on its dotcom ambitions and has slashed staff and scuttled listing plans.
Sources indicate that up to 12 staff, including three full-timers were booted out in December and another 20 more are expected to go on February 1, leaving a "skeletal staff" to maintain its flagship website, Asianauto.com.
A company spokesperson, who declined to be named, said the drastic cutbacks were prompted by the inability to raise fresh funding and as a pre-emptive move to prepare for a "brutal 2001".
"Full-time staff were given notice and offered compensation packages that were consistent with market expectations. Many of the staff we retired were contractors who we commissioned to do much of the early foundational work on the site, so we allowed their contracts to expire," he said.
He also indicated that a planned initial public offering has been delayed indefinitely, but that the company's investors continue to be supportive.
Delloyd pumped in RM4 million (US$1.05 million) last March for a 50.1 percent stake in the company but, sources noted, was unwilling to fork out more cash for the money-losing venture.
Delloyd is an established automotive component and accessories manufacturer and supplier and counts among its major clients Malaysia's national car company Perusahaan Otomobil Nasional Bhd (Proton).
The company has a network of over 400 local dealers and distributors and planned to exploit Asianauto.com as an e-commerce platform for its products.
Last July, Delloyd in a reply to a Kuala Lumpur Stock Exchange query, denied media reports quoting management that it planned to list Asian Auto Interactive this year. It also denied reports that it planned to raise its stake in the company.
In a separate reply that same month, Delloyd stated that Asian Auto Interactive's projected revenues of RM5 million by Dec 31, 2001 would comprise 70 percent in advertising and sponsorships, and the rest from e-commerce.
"Asian Auto Interactive has to work towards this revenue in order to meet the company's operating expenditure for the year," the statement said.
The company spokesperson contacted by ZDNet Asia declined to provide figures on revenue growth or monthly burn rates for the website.
He contended that the vertical portal "was never a pure content play."
"We have always followed a content-community-commerce model. By cultivating a loyal community based on the strength of our content and brand name, only then would there be a marketplace that would utilize the automotive services that we would provide," he explained.
He conceded that Asianauto.com desperately needed a new round of funding to bolster B2C and B2B e-commerce initiatives, but was unable to interest investors, given unfavorable market conditions.
One of Asianauto.com's early e-commerce ideas was to take a flat transaction fee from car dealers on sales of new and used cars on the site.
On November 8 2000, Delloyd announced that Asian Auto Interactive had entered a conditional agreement to acquire Premier Asian Auto Publications Sdn Bhd, the publishers for monthly motoring magazine Asian Auto, for RM300,825.
Sources said that the move indicated the controlling partner of Asian Auto Interactive favored the more established print magazine over the website.
Several staff contacted by ZDNet Asia blamed "management inexperience" for the company's dire situation. One ex-staff griped that he was terminated without written notice and only given a month's pay in lieu of notice.
"Management admitted in a staff meeting late November that they were in a financial predicament," said the ex-staff. "They said that they had sufficient funds to last till about February this year and assured us a lifeline would be extended by a current investor to the tune of RM500,000 to last us till mid-2001. They anticipated that by that time they would be able to secure the second round of funding. That never happened. Instead, we were just called in one by one and told to go," he said.
Asianauto.com was the brainchild of Mel Lee, the executive director and producer of the long-established Asian Auto magazine, who teamed up with little-known Internet consultancy SensoryLabs Sdn Bhd for its web development expertise.
Launched in February 1999, the website is currently headed by
SensoryLabs' co-founders, Patrick Lee, a former investment banker and Nikt Wong, a former equities dealer, together with content specialist Khoo Hsu Chuang, a law graduate and former journalist.
Ironically, up to press time, Asian Auto Interactive was still advertising job vacancies on its site and touting itself as "one of the coolest places in Asia to work at".
Published in ZDNet Asia.