8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 21, 2006

Autobytel Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-22239	33-0711569
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

18872 MacArthur Boulevard, Irvine, California	92612-1400
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (949) 225-4500

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events

On September 21, 2006, Michael Fuchs, Chairman of the Board of Directors, sent a letter to a representative of Liberate Technologies. A copy of the letter is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Letter dated September 21, 2006 from Michael Fuchs to Liberate Technologies.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Autobytel Inc.
By:	/s/ Ariel Amir
	Ariel Amir, Executive Vice President and Chief Legal and Administrative Officer

Date: September 22, 2006

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Letter dated September 21, 2006 from Michael Fuchs to Liberate Technologies.

EX-99.1

Exhibit 99.1

Michael Fuchs

Chairman of the Board of Directors

Autobytel Inc.

18872 MacArthur Boulevard

Irvine, CA 92612

September 21, 2006

Liberate Technologies

310 University Avenue

Suite 201

Palo Alto, California 94301

Attn: Mr. Phil Vachon

Dear Mr. Vachon:

I am writing to you on behalf of the Board of Directors of Autobytel in response to your proposal for us to consider two candidates for election to our Board. We welcome comments and recommendations from our shareholders and have institutionalized this attitude in our description of the responsibilities of our nominating committee. At a recent meeting of our Board and at a meeting of the nominating committee, our Board and our nominating committee extensively discussed your letter and other comments Liberate has made to myself and other Board members during conversations over the past several weeks.

As we have previously mentioned, we have been engaged, at the direction of the nominating committee, in a search for additional directors. Autobytel has also been engaged in a search for a new chief financial officer. We plan to recruit at least two new directors in the near future. Our Board believes that it is important to recruit directors with specific skills and knowledge that can best benefit the company as it embarks on its refocused media-centric strategy. Thus, we believe that at least one of the new directors should have automotive experience and the other should have marketing/advertising experience. Ideally, the persons who fill these slots should also have some familiarity with Internet commerce. As you can appreciate, finding directors with these credentials who have public company board experience is never easy, but is especially difficult with a small company. In addition, as part of our recruiting process both for the directors and the new chief

September 21, 2006

Page 2

financial officer, we have worked to assure potential candidates of the stability of the enterprise under its new leadership. Our Board strongly believes in the direction in which we are being led by our new chief executive officer. This strategy has been publicly announced and involves a refocusing of the business, which in many ways is consistent with some of the suggestions you made in your recent letter. That process has been under way almost from the first day that Jim Riesenbach arrived at Autobytel.

With the objectives described above, our nominating committee would be pleased to consider candidates who have experience as directors of public companies, whose skills and personality would strengthen the Board, and who would represent the interests of all of our shareholders. To that end, the nominating committee will contact you for additional information concerning the qualifications of each proposed nominee.

Finally, for several months our Board has evaluated and acted upon some of your suggestions, such as considering strategic alternatives. After careful and deliberate steps, we have determined that the present strategy under Jim’s leadership is in the best interest of our shareholders to maximize shareholder value. We are committed to a frank exchange of views with our significant shareholders with a view to the successful development of our new strategy under Jim and his team.

Very truly yours,

/s/ Michael Fuchs