Auto-By-Tel Exec Resigns

Internet auto shopping service Auto-By-Tel Corp. said Friday that founder Pete Ellis has stepped down from his operating posts in a move to strengthen the company’s credibility in the market.

Mark Lorimer, formerly chief operating officer, will replace Ellis as president and chief executive. Michael Fuchs, former chairman of Time Warner’s HBO and Warner Music subsidiaries and a major investor in Auto-By-Tel, will become chairman.

Lorimer said Ellis decided to step aside because he wants to concentrate on planning instead of dealing with the financial aspects of a growing company.

In a prepared statement, Ellis said Lorimer, a lawyer who specialized in securities law and corporate financing, is expected to take Auto-By-Tel “to its next level.”

Lorimer said the changes were not instituted by investors, who have put more than $42 million into the company, but by Ellis, who owns 30% of the company’s stock.

Ellis, a well-known Southern California new-car dealer who went broke during an industry downturn in the early 1990s, founded Auto-By-Tel in 1995 as an alternative to the traditional way cars are sold.

The service allows consumers to do their shopping and pricing without setting foot on a dealer’s lot. Once a consumer decides to buy, Auto-By-Tel refers the transaction to a dealer, who has paid a fee to belong to the service and who promises to sell cars at discount prices.

Auto-By-Tel says that more than 2,700 dealers belong to its network and claims to be responsible for more than $500,000 a month in car sales.

The company has been rated the top Internet car-shopping service by several firms that evaluate online marketing.

The company called off a bid to go public last year when it became apparent that the market would not price its stock high enough to enable backers to cash out their investments.