Yahoo!-TrueCar deal never made sense
The dismantling of the exclusive online partnership between mass-market Internet portal Yahoo! and TrueCar.com isn't surprising. The deal made little sense from the beginning.
When the partnership was forged in January, Yahoo! was going to deliver millions of unique visitors to its auto shopping site and direct them to TrueCar's growing base of dealerships.
The big problem: Yahoo! isn't a bottom-of-the-funnel buying site; it's not a site that attracts consumers who are ready to pull the trigger on a deal. Rather, it's a perfect place for people interested in a bit of tire kicking.
TrueCar, on the other hand, needs immediate buyers for its participating dealerships. That's how it makes money.
But the beginning of the end of the Yahoo! deal came when TrueCar ran into legal issues with state regulators and dealer associations. It soon had to cut its national advertising as it backpedaled and had to fix its business model to de-emphasize discounts and keep its dealers happy.
Now, TrueCar's revamped business model and Yahoo's new approach of opening up Yahoo! Autos to multiple partners create more options for consumers and generally make sense.
The moral of the story is simple: Know your business -- and choose partners that make sense.