But that same dependence on physical assets raises questions about the future of Manheim's online businesses. Right now, AutoTrader.com and Manheim Interactive both pay fees to Manheim Auctions for access to its inventory information and to its services. Will the parent company be so eager to share its resources once Manheim Interactive starts stealing away transaction fees that would have gone to offline auctions, or once AutoTrader.com starts cutting into Manheim's inventory of late-model, low-mileage cars?

"To some extent, we are doing work that is contrary to the message that Manheim has been sending to dealers," Logan admits. "For 55 years, it's been telling dealers that the best place to sell their cars is at the auction. Manheim Interactive is now saying, 'Hey, if you want to sell cars without bringing them to the auction, we're here to help you do that.' Sooner or later, there will be some contention between the two companies. Our job is to structure the relationship so that we're making decisions that are best for customers."

Perhaps the biggest opportunity for both Manheim Interactive and AutoTrader.com lies outside that parking lot of assets that the parent company offers, Logan says. "Only 30% of the cars sitting on a used-car lot at any given moment came from auctions like ours. The other 70% came from transactions with other dealers, with wholesalers, from consumer trade-ins, from banks, or from manufacturers. We want a piece of that 70%. And we have an opportunity to develop Internet-based services that can bring value to buyers and sellers. For example, typically, you find that dealers often do business only with a limited number of other dealers with whom they have long-standing relationships. By introducing Manheim into that dealer-to-dealer transaction, we will be able to offer dealers access to a wider range of potential buyers -- with the Manheim brand supporting that transaction."

And how would Manheim prevent dealers from swindling each other? "We would hope that sellers represent vehicles accurately. They won't be in business long-term if they get a bad reputation. But if we find out that there are people who consistently behave badly, we do have a hammer that we can introduce, which is to bar them from our physical auctions." In other words, Mother never promised that she wouldn't deliver a well-deserved spanking once in a while.

Ultimately, Logan believes that Manheim has the opportunity -- and the resources -- to reinvent the way that people buy used cars. He believes this so strongly that he turned down several hefty dotcom-CEO job offers and relocated his family to Atlanta from the West Coast. "This is almost a canonical example of business-to-business electronic commerce that is in play and that has the potential to transform a major sector of the American economy," Logan explains. "That sounded like fun to me."

Cheryl Dahle (cdahle@fastcompany.com) is a Fast Company senior writer. Learn more about Manheim Interactive on the Web (www.manheim.com), or contact Hal Logan by email (hlogan@worldnet.att.net).

Sidebar: Desktop Dealers

Manheim Interactive wants to do more than help dealers sell cars more efficiently. It wants to help them run their businesses more intelligently. To that end, the company has created a set of desktop services that bring it even closer to its customers.

For example, more than 7,000 dealers cough up an additional $30 per month to use the company's Tracker software, which helps users manage inventory, calculate deals and commissions, and secure financing for customers.

Tracker attends to several needs that dealers have. The software's "FundHere" feature allows a dealer to get financing for a customer, even if that customer has a bad credit rating. That's because Manheim pools the financing business that it offers to banks. "The banks and credit institutions that we've lined up have the opportunity to write more than a billion dollars per month in loans for cars," says Hal Logan, president and CEO of Manheim Interactive. "And when they accept a loan, we get a fee."

The software also allows dealers to track buying patterns to discern which kinds of cars are hot sellers for them. And because Tracker becomes a dealer's primary deal-making tool, Manheim gets a window into customer behavior that it can use to develop new products and services. "We want to create a world-class database so that we will know our customers better than anyone else," says Beverly Shepard, 40, director of marketing for Manheim Interactive. "There's no reason why we can't be the Lands' End of the auto industry."