Aircraft Shopper Online Flies High With 3rd Profitable Year.

Business Editors, High Tech & Aerospace/Defense Writers

CORTE MADERA, Calif.--(BUSINESS WIRE)--June 5, 2001

ASO.com Thrives by Changing the Way Pre-Owned

Aircraft Are Bought and Sold, Proving That a Dot-Com with a Strong

Business Model Can Survive the Tech Bust

Aircraft Shopper Online (ASO) has just logged its third consecutive year of profitability, defying the odds in an environment where the business pages are filled on a daily basis with the obituaries of online ventures.

The $2.5 million, 18-employee company, an Internet-based listing service for sales of pre-owned aircraft, has enjoyed average revenue growth of 40 percent a year for the last three years as well as significant increases in aircraft listings. Revenues are derived exclusively from listing fees charged to aircraft dealers, brokers and private sellers, ranging from 83 cents to $5 per plane per day.

At the same time, ASO has played a leading role in changing the way pre-owned aircraft of all types are bought and sold. Many dealers report that more than 50 percent of the aircraft sales they now close stem from leads generated by Internet classifieds. ASO paved the way in a community that was initially highly skeptical of the concept.

"Five years ago, the idea of marketing aircraft over the Internet was considered farfetched, even though it offered clear advantages over print advertising," said Tony Friend, President of ASO. "Today, it's not only an accepted way of doing business but also the preferred way for most dealers and brokers. It's been a remarkable change."

Preparing for takeoff: Friend and his partner Richard Cunningham, the company's Chief Technology Officer, conceived of ASO before the term "dot-com" was even coined. Both came from computer backgrounds and had no connection with the aircraft industry until they launched ASO in 1995. They arrived at the concept of promoting aircraft online simply by analyzing how they could best exploit the fledgling Internet medium.

"We realized that the Web was the perfect vehicle for selling big-ticket items because it could accommodate far more information than a print ad and also get the asset on the market immediately rather than waiting for an ad to appear in print," Cunningham said. "At first we considered yachts because Tony had once been in that business, but then we realized that aircraft would be a better fit because it's a market with no geographic boundaries.

Wooing advertisers: In pursuing the idea, Friend and Cunningham discovered and acquired a small Web site called Aircraft Shopper Online (ASO.com) consisting of a static, print-style listing of airplanes for sale. Drawing on

their computer expertise, the partners repackaged the site in a highly interactive format that enables users to browse by aircraft category and model within each category or sort listings by any criteria.

The pair launched the improved site in 1996 and went looking for advertisers. In those early days of the Internet, many dealers and brokers saw no reason to increase their advertising budgets by adding online ads to established print sell sheets. Others accused ASO of trying to put them out of business. Friend and Cunningham persisted, initially offering free ads and transitioning to paid placements when the online listings began to produce results.

Leading the pack: Even though the company now has competitors, including online editions of print publications like Trade-A-Plane and Controller, ASO remains the only business of its kind that generates revenues and profits by charging commercial rates for online ads. Other sites either charge nominal fees or throw in Web ads for free as an inducement for paid advertising in their print outlets.

ASO has more than 3,200 aircraft listed on an average day, representing well over half of the aircraft for sale in the country. Roughly three-fourths of the serious U.S. aircraft dealers and brokers are ASO advertisers, many of them ignoring the other online venues entirely. The majority take advantage of the Internet's ability to expand on traditional classified-style ads by placing more expensive "comprehensive" listings containing detailed technical specifications, key history and up to six pictures of each aircraft.

Soaring to success: Friend and Cunningham attribute ASO's success to factors ranging from the Internet's ability to overcome the limitations of print-based aircraft ads to the company's sound model for generating revenues. First-mover status also played a part, allowing ASO to secure the confidence of dealers and brokers before competitors arrived on the scene.

The partners believe that ASO's continuing efforts to provide easy searches and extra features have made a difference as well. Buyers can now create detailed profiles of the aircraft they wish to purchase, for example, and then have ASO alert them via e-mail as soon as planes that fit the profile become available. Users can also tag ads for aircraft they like or don't like, append notes to any listing, and automatically retrieve those preferences and notes whenever they visit the site.

Finally, and simply, ASO advertising works. Ads on the site regularly trigger the sale of everything from two-seater single-engine Cessnas to executive-style business jets. Last year, an ASO ad led directly to the sale of an ultra-deluxe Gulfstream V worth more than $35 million -- a transaction believed to be the largest of its kind facilitated by an online ad.

"Early on, a leading venture capitalist told us that if print sheets like Trade-A-Plane and Controller ever got their own Web sites going, we would be out of business," Friend recalled. "They did launch sites, and it didn't affect us negatively at all. In fact, it simply validated what we were doing. We've become accepted and trusted within the aviation community, and we're looking to expand our services. We're a dot-com that didn't bomb, and we plan to be around for a long time."