John Holt

The problems with the big three Detroit automakers has found its way to Seattle. The Cobalt Group, which operates Web sites for roughly half of the country's automobile dealers, today laid off about 45 staffers or 4 four percent of its workforce.

"This is a really tough economy," said John Holt, who co-founded the Internet company in 1995 and now serves as its CEO. Holt noted that auto sales are at a 50 year low and that an estimated 900 auto dealers have gone out of business this year. That hurts a business like The Cobalt Group, which last year was on track to do $170 million in sales as it ran online advertising efforts and sales leads for about 10,000 dealers.

Holt said the auto industry is at the "epicenter" of the economic difficulties, which has caused The Cobalt Group to recalibrate its business. The move comes after a major expansion. Earlier this year, the company opened a new facility in Lynnwood with room for 300 workers. It now has about 1,000 workers worldwide.

Holt said he had no regrets about opening the new facility calling it a "great success." In fact, he said the company is on track to grow profits, revenue and headcount this year despite the overall problems in the auto industry.

"Even if marketing budgets shrink, more money is going to go to digital," he said. "I am bullish about what we are doing, absolutely. But it is not going to happen as fast."

Holt admits that the car business is rapidly changing, with lawmakers contemplating a bailout for the industry. That's something that would have been unheard of just four of five months ago, he said.

Because things are moving so fast, Holt said he's trying to keep his mind focused on a two-year horizon rather than the short-term problems that appear in the headlines every day.

Even so, Holt has opinions about what the government should do. It shouldn't come as a surprise that he supports a bailout of the auto companies. (General Motors is one of The Cobalt Group's biggest customers.)

"I don't think the country can take the loss of 3 million jobs," he said.

The Cobalt Group has been through tough times before. It almost went out of business during the dot com bust, but a $37 million buyout from Warburg Pincus resulted in the company going private in November 2001. It then raised a whopping $92 million in financing from Warburg and other investors in 2004, money that it used to buy out competitors, build new technologies and ramp up hiring.

A 4 percent layoff may seem small given what faces the auto industry. But Holt said it is the right amount given the prognosis for 2009.

"The company continues to do well because we are on the right side of the digital media transformation," said Holt, referring to bankruptcy at newspaper giant Tribune.