CarsDirect.com Founder Scott Painter and KPMG Managing Director Bob Buce Launch Direct Ventures.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--June 12, 2000

Company Will Expand Online Direct Sales Channel

For Variety of Big-Ticket Commodity Items

Scott Painter, co-founder of CarsDirect.com, and Bob Buce, formerly of KPMG, today announced the official launch of Direct Ventures, a new company that will expand the Internet-driven direct sales model to sell big-ticket commodity items online in a "one-stop shop" environment -- and provide real solutions for "thoughtful purchases" over the Internet.

Painter, 31, who was Founder, CEO and Vice Chairman of CarsDirect.com, serves as Chairman of Direct Ventures. Effective July 15, Buce, 51, will leave KPMG Consulting as Southern California Area Managing Director/Consulting Services, to become President and Chief Executive Officer of Direct Ventures. Buce previously served as Managing Partner with KPMG LLP, prior to the spinoff of KPMG Consulting as a separate entity.

Direct Ventures currently is developing an umbrella organization centered around direct, Internet-based sales of such goods as boats, motorcycles, major appliances and literally any mass-produced product that retails for more than $500.

In addition to providing a powerful Internet front-end for the purchase of big-ticket items, Direct Ventures companies will become part of the distribution structure in their respective industry segments -- and thereby forge close, integrated relationships with manufacturers. In this way, these companies will more effectively promote various brands and bring product to consumers more efficiently. This effort will be combined with strategic acquisitions of brick-and-mortar companies to transform the various vertical markets in which Direct Ventures operates, making the company one of the first "Internet Industrialists."

"We intend to be the consumer's advocate by putting them in control of the direct buying experience, on the premise that the direct experience is simply the best for the consumer," Painter said. "With an eye toward creating ventures that win in their own vertical -- not just on the Internet -- Direct Ventures will identify existing high-ticket, commodity-item businesses and increase effectiveness by capitalizing on the promise of the Internet and the direct sales model. We'll serve as an `Internet industrialist,' transforming various segments with the power of the direct model and by truly being in these businesses, both online and offline."

BoatsDirect.com: First Out of the Gate

Direct Ventures' first foray into the market is BoatsDirect.com (www.boatsdirect.com), the leading new boat e-tailer. Painter recently joined that company as chairman and a founding equity investor. BoatsDirect.com, previously based in New York, was founded in 1999, and as a Direct Ventures Portfolio company, plans to continue to evolve the boat industry, improving efficiencies and passing the benefit on to the consumer -- much the same way that CarsDirect.com continues to redefine the car buying experience.

With idealab! Chairman Bill Gross, Painter founded CarsDirect.com in 1999 to enable consumers to take control of the vehicle purchase process and in turn provide a simplified, more convenient car buying experience coupled with great pricing. Through Direct Ventures, Painter plans to bring similar positive buying experiences to commodity goods at or above the $500 price threshold.

"CarsDirect.com was the first company in the automotive space to provide consumers with the power of choice and an upfront price," Painter said. "The Internet provides an opportunity to expand the marketing reach and maintain customer relationships -- and this in turn will enable Direct Ventures to leverage existing channels on a much larger scale. Direct Ventures will provide the platform to create specialized direct sales Web sites that will ultimately offer greater consumer convenience, an end to the `pricing mystery,' lower prices, and solutions designed to create a one-stop shopping experience. After all, if car-buying can be transformed into a pleasant experience, replicating that experience for other products is a natural next step."

Direct Ventures companies will offer a variety of value-added services that are not in themselves commodities, including research, financing, insurance, even home delivery. "We are committed to finding the solution to consumer satisfaction no matter how deep into the vertical we must go to provide the consumer with a true direct experience," he said. "Customer satisfaction is our true loyalty, the rationale for providing an end-to-end solution. Direct means one-stop shopping -- so the consumer doesn't have to hassle with five people to make one complex transaction work. The solution varies by industry, but the customer will have one point of contact that will not change throughout the process. To date, no one has effectively tapped into the entire value chain. Not only is this a tremendous opportunity, but it will relieve a huge frustration at the consumer level."

According to Buce, the potential to leverage the direct sales model in various commodity goods sectors is enormous. "We're in the midst of a sea change in the way people buy products -- a fundamental shift in buying patterns and customer loyalty to brands. No longer do people have to be sold, they can choose. The Internet puts the consumer in control of the purchase process while also creating a wider net for specific industries. At the same time, there's a sound value proposition here for manufacturers, as our consumer-centric companies pump up brand loyalty and purge inefficiencies from the current distribution model while providing a platform for establishing strong brand awareness.

"Our goal is to make buying big-ticket consumer goods as effortless as possible," Buce added. "We're operating across the spectrum of these big ticket items, in the 'thoughtful purchase' category. Consumers should have the opportunity to buy refrigerators, speedboats and motorcycles as easy as buying a book online. The direct experience is about starting with a relationship that profits from after-sale involvement."

As Direct Ventures' Chairman, Painter is tasked with identifying businesses that will benefit most from the integration of the Internet and the direct sales model and then recruiting the senior management who will run them. The keys to the success of these businesses, according to Painter, are, "marquee investors, an appropriate level of funding, great corporate culture, talented management and profitable businesses in their respective categories. Ultimately, the role for Direct Ventures -- and the value-add for the individual companies -- will be to help these businesses grow at warp speed with the roadmap of Internet success story under their belts."

About Direct Ventures

Based in West Los Angeles, Direct Ventures is expanding the promise and potential of direct Internet sales by integrating all key transaction elements into the online purchase experience. Direct Ventures will seek to expand the online direct sales channel to provide consumers with a true, one-stop shopping opportunity -- tapping into the entire value chain to offer financing/leasing, insurance, extended service agreements and warranties, product accessories, transaction documentation and trade-in options as needed. Direct Ventures currently holds an equity stake in BoatsDirect.com, the leading new boat e-tailer.