The two biggest Internet car-buying sites, both struggling to make money, agreed April 11 to merge in a move that analysts say may accelerate the demise of their smaller competitors.

Autobytel.com and Autoweb.com will merge in a tax-free stock swap with a value that analysts estimate at $15 million.

The deal is expected to be completed in the third quarter. The combined company, which will be called Autobytel, will trade on the Nasdaq exchange under Autobytel's existing stock symbol, ABTL.

Both sites will continue to operate, according to company officials.

Company officials refused to say whether jobs would be cut because of the merger. Autobytel employs 260 workers, while Autoweb has 140.

The two sites have about 10,000 dealers paying them fees for their services. Because of overlap, they expect the combined company to have about 7,000 dealers signed up when the merger is completed.

Although they are the two biggest players selling vehicles online, neither company has yet earned a profit since they began operating two years ago.

Stock values for both companies have fallen dramatically. Autobytel's share price closed at $1.35 Wednesday, much lower than the $58 a share the stock commanded 2 years ago.

Autoweb was about to be delisted from Nasdaq because its share price was trading below $1 for too long. Its stock closed at 40 cents Wednesday, down precipitously from the $50 a share Autoweb traded for 2 years ago.

Mark Lorimer, CEO of Autobytel, is still predicting, as he has for months now, that the combined company will turn a profit in the third quarter. "We anticipate that our revenue will exceed $100 million on a combined basis," Lorimer said.

Lorimer will be CEO of the combined company. Jeffrey Schwartz, CEO of Autoweb, will be vice chairman.

Analysts say declining revenue could force the remaining six or so major auto-buying sites to fold or look for partners. Their numbers have declined from more than a dozen about a year ago.

With profit margins on new vehicle sales continuing to fall, more dealers will cut back on buying customer referrals from the independent Web sites, according to some analysts.

But other car-buying services say they are in for the long haul.

"We are having record traffic and record financing and insurance sales on our site," said Wendy Barbour, vice president of communications at CarsDirect.com, which bought Greenlight.com in February and has about 3,000 dealers signed up.

Four of the nine major independent auto shopping portals at the 2000 National Automobile Dealers Association (NADA) convention have either gone out of business or been acquired by a competitor.

Internet referral services, such as Autobytel, and online classified advertising sites, such as Cars.com and AutoTrader.com, rely mostly on dealers for revenues.

There is some evidence that dealers are generating more leads on their own and losing interest in online buying services, either reducing the number of subscriptions or dropping them altogether, according to Dr. Paul Taylor, NADA's chief economist. Dealers' use of third-party buying services fell to 40.5 percent in 2000 from 54 percent in 1999, and Taylor expects another decline this year.

To reduce its dependency on dealer fees, Autobytel plans to launch a 90-day test of a partnership with General Motors involving 22 dealers in the Washington, D.C., area. Dealer fees currently represent 81 percent of Autobytel's revenue, but the company says it intends to shrink that to 70 percent in three years, and to 60 percent in five years.