August 21, 2000 CarOrder.com has abandoned on-line car retailing, at least for now. After spending $100 million over the last two years, the company said it was stymied by roadblocks thrown up by car dealers.

The Austin, Texas, venture hopes to return at some point. Its strategy is to buy up existing dealerships, giving it a reliable source of cars that it can then sell online. On the other hand, it's been trying to buy up dealerships for the last several months and has so far come up empty-handed.

CarOrder.com had been filling orders by buying cars from dealers and reselling them. But that strategy ran into trouble after Ford and General Motors warned dealers not to do business with online concerns.

Dealers, in turn, have been putting pressure on the manufacturers to "blacklist" online dealers and have also been flexing their powerful lobbying muscle on the state level, throwing up all kinds of barriers to anyone tying to sell cars without being licensed as a dealer in each state.

Ironically, the most hostile state was Texas, where CarOrder.com is based. The legislature there has made it illegal to sell cars over the Web -- except for sites operated by Texas dealers, of course.