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GM's Internet division backs quietly into parent company

Two years after launching its e-GM Internet division to sell cars and trucks direct to consumers, General Motors is slowly and quietly merging the unit into the company's mainstream.

GM claims this isn't a retreat from e-business, but that the company planned all along to eventually reincorporate the division into the rest of the company. "We're not scaling anything back," said a GM spokesman. "We're not refocusing."

The e-GM division was launched in August 1999 as a separate entity to give it autonomy and fast success. Eventually, the company's plans called for the unit to be merged back into the parent company when employees throughout GM was ready to view the Internet as a key part of its automotive and truck sales business.

Thilo Koslowski, an automotive analyst at GartnerG2, said this was the right thing to do for vehicle manufacturers.

Vehicle manufacturers tend to be especially large and slow moving, making them less able to adapt and use the Internet for selling, Koslowski said. "It's extremely difficult for an auto manufacturer to do it from within," he added.

"Ultimately, e-business will become 'business' and the 'e' will go away," he said. "Now you have to get the rest of the company to understand it."

By setting up a separate e-business division, GM avoided much of that trouble, he said, making its e-commerce effort one of the more successful ones among car manufacturers.

About 3,000 sales leads per day are received by GM dealerships through the customer traffic generated by the e-GM Internet division on the company's BuyPower Web site.

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