Monday, December 24, 2007

Holiday Break, Wishes to all and See you in London

Dear BOOT readers,

Merry Christmas, belated Happy Hanukkah, Seasons Greetings, Happy New Year and for our European friends
  • Buon Natale e Felice Anno Nuovo 2008,
  • Joyeux Noël et nouvelle année heureuse 2008 !
  • Fröhliches Weihnachten und glückliches neues Jahr 2008 !
  • Feliz Navidad y Feliz Año Nuevo 2008 !
  • Vrolijke Kerstmis en Gelukkig Nieuwjaar 2008 !
I am intending to take a little bit of time off the blog, aiming to be back on January 7. Except that I have a couple of interviews to do or that are done and need to be written up so there probably will be a couple of holiday posts.

Am also going to be in London the week of Jan 14. Hope so see some of you there.

Have enjoyed blogging through 07 - hope you can join me for another year.


Friday, December 21, 2007

Confirmation - Genstar buys TravelCLICK

It was a rumour on the BOOT in September, underground confirmation on the BOOT in November, now official announcement that PE firm Genstar are the new owners of Travel intelligence and marketing firm TravlCLICK. Stay tuned readers - 2008 is going to be fun.

Kayak buys Sidestep for $200mm

Hot of the blogsphere care of TechCrunch and days after I pondered if an OTA would buy a meta-search provider we find that Kayak has raised $196mm, from pretty much everyone on Sand Hill Road and used the money to buy Sidestep for around $180mm (plus $20mm in cash reservers at Sidestep equals $200mm). Arrington has the full story here.

Sidestep will lose 55 staff (out of 75) including CEO Rob Solomon (after 60 day transition.

What are the possibilities here:
  • Do they keep two brands?
  • Do they merge the content businesses that each of them built or bought to do SEO?
The biggest question of course - is this a sign of strength in the market with one and two coming together to dominate or a sign of weakness that they need to get together to survive? Deal of the year at the last moment in the year.

UPDATE - Adam Healey over at VibeAgent has crunched some numbers on the deal putting the combined entity (or new Kayak) at a valuation of $450 million or a P/E of 35 (assuming 15% margin on TechCrunch's reporting of combined revenues of $85 million).

UPDATE 2 - Interview here with Kayak's VP Communications Kellie Pelletier about the deal,

WHOOT: secures AOT shares and secures

WHOOT series update - WHoever Owns Outright has lodged what I am sure is their favourite filing of the year in stating that they have jumped to 82.129% of through an acquisition of AOT's 19% stake. Travelweekly have some good commentary here from AOT CEO Andrew Burnes. Seems he was very interested in securing his distribution through - though would appear he has made a nice profit as well.

There is now no reason for the remaining shareholders to keep a hold of their shares. Wotif have crossed the magic 75% barrier and this deal is over. Now all Wotif have to do is to figure out what to do with three brands in one market, HQs in two cities, two supplier teams talking to the same people, two CEOs, two maybe three technology platforms and a partridge in a pear tree.

UPDATE - 31 Dec up to 83.313%

UPDATE 2 - has declared its offer "unconditional". This means it does not matter if any other acceptances are made or not. Either way Wotif will purchase all the shares that have accepted the offer. To increase the certainty that this will be as many shares as possible, they have also extended the period for acceptance (for a second time) to 31 January 2008. In checking through the filings came across this great piece of advertising placement on

FINAL UPDATE - deal done! Confirmation that Wotif have 97% of the stock and can compulsorily acquire the rest. The offer formally closed today (1Feb08). TravelWeekly

Airline Industry - Sri Lankan style - give the president a seat or get the hell out of town

There is simple rule when you are in charge of a government owned airline - do whatever the president of the country says or pack your bags. Unfortunately Peter Hill the now CEO of SriLankan Airlines (British National) was caught by this rule. Story from e-tid (registration required) that staff at the airline refused to bump 35 passengers from a it scheduled London to Colombo via Maldives flight to accommodate President Mahinda Rajapaksa and his 35 strong entourage. Rajapaksa was returning from seeing his song graduate from the Royal Naval College (ie not official business). There is clearly a bit of he said, she said behind this story. The Airline says quite simply that the airline was full and no notice was given. The president seemed to channel blues great BB King by saying words to the effect of "by I am paying the cost to be the boss", threw in a little bit of "dont' you know who I am" before ending off with "you'll be sorry come Monday morning" (ok I made that bit up). In the end the Prez had to charter a flight to get home. Come the morning Hill's work permit is revoked forcing him to give up the top job at the airline and presumably leave the country. Hill was appointed to the airline by Emirates (who own 43.63%) so hopefully will be quickly saved from the jobless queue. For standing by his customers despite the utmost pressure that can be applied I have given Peter Hill the inaugural BOOT Airline Customer Care Devotee of the Year award.

UPDATE - 8 Jan 08 Emirates has announced (according to TravelToday) that it will not renew its management contract in March with SriLankan Airlines and sell its stake in the carrier. I would guess the deportation of a key Emirates exec must have been a factor or at least an indication of the state of the relationship between Emirates and the Sri Lankan government (though there is nothing in the story to suggest a link).

Wednesday, December 19, 2007

TripIt Sessions: Interview with TripIt CEO Gregg Brockway

The BOOT remarked recently on the entry of travel start-up TripIt into the A-league of start ups for 2007 through its anointment through its admission by Valley A-listers Michael Arrington and Jason Calacanis into the Techcrunch40 conference. I blogged about that and my initial experiences in using the product. Through the power of the interweb this post led to a chance to interview TripIt Founder and CEO Gregg Brockway. Here are some of the stories from that conversation.

Where did the TripIt idea come from

Tripit’s pitch to the online travel consumer bombarded with too much information is to give the consumer one place to send all of the confirmations that are generated from suppliers and retailers to be stored and organised in one spot. From that one spot recommendations and ancillary services can be provided. The idea came to Brockway and co-founders Scott Hintz and Andy Denmark from two related trends

1. booking travel online is hard. It should be easy as online travel is 10+ years old and a mature market but it is still hard to do. Multiple sites, multiple formats and big value items; and

2. the supplier direct market is the fastest growing section increasing the number of sites consumers are booking on to put together a holiday.

Oh – and the founders have an addiction to start ups.

New features coming out regularly. Latest was integration into online calendars (

Where did the founders come from?

Brockway was part of the crew that built up Hotwire and sold it to Expedia (then part of IAC). He then moved into a divisional president role heading up Classic Vacations - the luxury travel and offline part of Expedia. As Gregg admitted, hardly a good home for an Internet focused executive.

How hard is it to connect to a supplier? Do you need their co-operation?

Brockway says they have invested a lot up front in building a system that can easily adapt to different data fields and structures. A new site/supplier can be added “in a few hours” to the list of those that can have there data exported into a TripIt combined itinerary. The selection processes for which supplier to do next is easy – whatever are submitted the most by users that are not already in the system. Biggest challenge to face is PDF itineraries. They recently launched the first version of their PDF reading functionality which is working on a vendor by vendor basis. Once they have that right the number two challenge is when email confirmation is a link to details on a web page.

Other team and company bits and pieces

  • Staff: 10 staff.
  • Traffic: First full month of traffic was 45,000 users. Month two “bigger than month one”. The part I liked about this traffic story was that a mention in Lifehacker drew more traffic than a mention in the New York Times.
  • Users: 40% of users are outside the US. Not what they expected.

How did you raise your money

It took TripIt six months to put the product in a state before it could rais its million dollar round with O'Reilly AlphaTech. Needed to have an alpha to show the businesses. Brockway believes it is a challenging environment for travel startups to get funding. This is mainly because travel is not the hot sector that it once was in VC activity, especially compared to video, social networking, alternative energy etc.



My Take

A lot of the pieces are in place for TripIt to succeed. Brockway and his founders know the space and have thought this through. They have cash. I can see the need for the product. I have just this week booked a flight for Madame BOOT to return to the homeland for a visit (Italy). It involves two separately booked flights on two separate carriers with two separate confirmation slips. Last week I booked a family trip to New Zealand. Three sets of confirmation (air, car and farmhouse). Monetisation should not been an issue. If TripIt can connect to a critical mass of suppliers and generate traffic, then monetisation is easy as travel advertisers love to pay for access to travel consumers. The challenge remains around acquiring the traffic. This is a big challenge. The meta-search start ups get their traffic in an arbitrage game between search engines and travel advertisers. The Travel 2.0 start-ups get their traffic by becoming SEO/Long Tail magicians. Brockway and team are going to the harder route of “build a fantastic product and they will come”. Once out of beta the product should be good enough – question is “will they come”?

UPDATE May 1 08- during the interview Brockway hinted at the imminent closing of a funding round. Announcement a week or so ago that a round closed. Sabre is an investor. See update here.

Monday, December 17, 2007

Meta search vs OTA: Should an OTA buy a meta-search company?

Was asked an interesting question about meta-search and online retail by a share analyst reader. Paraphrased, the question was
We get plenty of Private Equity calls relating to meta-search companies. Most want to know if these companies would work in Europe and who would be interested in buying them. Do you think that an online travel agency could/would buy a meta-search engine?
The main difference between a meta-search company (Sidestep, Kayak, Bezurk etc) and an online travel agency (Orbitz, Expedia, Travelocity etc) is that the first group are media companies and the second are retailers. The common element is that each is after the traveller - wants to attract travellers to the site to commit to a revenue generating activity. However the meta-search media business requires very different approaches to marketing, customer retention and business development than the OTA. This is because the activity the consumer is engaged in is different, the tools for retaining customers are different and the revenue model is different. Will quickly touch on each and then look at whether or not an OTA should buy one.

Customer Activity - You would think that since the activity on both meta-search and OTA is search that there would be little difference in customer activity. However the difference here is what is going on in the customer's mind. A consumer on an OTA is experience hunting. Is looking for advice, support, connection - all of the things a consumer desires from a retailer. In meta-search the consumer is singular in their focus - give me the cheapest price on the exact thing I want. This is why OTAs invest so much in brand and customer care. Meta-searchers are traffic arbitragers - they survive by buying traffic at a cheaper rate than advertisers will pay for referrals.

Customer Retention - Retailers can work to keep customers by offering discounts, exclusive deals and targeted promotions - ie product. Meta-search retention comes through bringing consumers into the search experience through reviews, social networking and new inventory connections - ie content.

Revenue Model - commission vs pay per click; cash from consumers vs bucks from media buyers; selling travel vs selling eyeballs.

OTAs therefore have the advantage in customer retention and breadth of marketing tools. But meta-search has the advantage in ease of access to supply and significantly reduced operational costs (no need for customer care and reduced supplier relations costs).

It is because meta-search is media rather than retailer that the biggest meta-search deal around was Farechase being bought by a media company - Yahoo!. However this does not cancel out an OTA as a potential buyer of meta-search. We have a very power example of success in an OTA buying, owning and running a media company through Expedia's ownership of TripAdvisor. Any acquiring OTA just has to embrace being a media company.

I am a fan of the meta-model but (as with all web companies) it is all about good product and execution. There is lots of success in travel so far for meta-search but comparison experts like Pricegrabber have already failed in moving to travel. The fit with a media company is stronger than that of an OTA. Of course - haunting the whole sector is whether or not the general untargeted search people (ie Google) develop the more targeted tools of meta-search.

Friday, December 14, 2007

Airline Industry - Wharton on Emirates

Very interesting read here from Knowledge @ Wharton on Emirates based on a lecture from Emirates founder Maurice Flanagan given at Wharton.

Couple of interesting points from the note:
  • Airline was started with $10 million 22 years ago. In total the government has invested just $18 million in the airline. Claims that the airline pays the ruling family a dividend of more than $100 million a year;
  • Emirates so far has ordered 55 of the new A380s (at $250mm a pop); and
  • 20,000 employees - none of them with the word "marketing" in their title.
Thanks to Madame BOOT for forwarding.

WHOOT: Slow news day - slow acceptances for Wotif bid

WHOOT series update - WHoever Owns Outright

Latest filing shows that is now up to 60.75% of This is up from 59.2% last week.

Thursday, December 13, 2007

Travelzoo Australia is bringing in some help from the mothership

I updated my Travelzoo to launch in Australia post today. I have heard a very reliable rumour that in January at least one maybe more US based Travelzoo staff will be seconded to Sydney for an extended time to help local boss Brad Gurrie with the set up.

Meanwhile despite the market's poor reaction to Travelzoo's recent results (in part because of costs associated with new market launches), the Motely Fool site has put Travelzoo on its list of "4 Internet Stocks to Buy in 2008".

Wednesday, December 12, 2007

Qantas is still loading its Christmas Greetings

Poor old Qantas can't win a trick sometimes. They tried to be nice to me and send me an electronic Christmas card and thank me for participating in the Qantas Customer Advisory Panel. But something is not quite right in the email.

They provided two ways to access the card. The second one was this
If the above link doesn't work, view the following url in a browser:

Unfortunately the result of a copy and paste is a static page that looks like this - "still loading" - and stays like this no matter how long you wait. Tried it in both Firefox and IE7.

Thankfully the first way works and ends up at quite a sweet and well put together card. Here it is if you want to see it.

Qantas may have fixed this by the time you have read it so you may have to take my word for it.

Tuesday, December 11, 2007

Book Review: 50 Great e-Businesses and the Minds Behind Them

Is turning into a bit of a book week here at the BOOT. Recently we had the launch of the Tips from the T-List book (download your copy here). Now I have (finally) found time to read and review a book sent to me some time ago called "50 Great e-Businesses and the Minds Behind Them" by Emily Ross and Angus Holland. Emily was kind enough to send me the book many months ago and I have been slow to get to it. But having read through it now I am very glad that I made the time and wish I had looked at it sooner.

The book aims is to provide start-up advice, management advice and tips on innovative thinking techniques through an analysis of the background and numbers behind top ecommerce companies and service providers. The challenge with attempts at writing profile books on online companies is that the stats and figures are out of date months before the book is published. Ross and Holland have managed this limitation very well by stressing the history and thinking behind each of the companies chosen rather than the numbers. This focuses your attention on the genuinely interesting stories behind successful companies and the entrepreneurial insight from key players rather than the temporal accuracy of the numbers.

For example in the entry on YouTube I was caught up in the story of the founders, fund raising and feature changes and therefore did not care that the intro lists the start-up costs as $3.5mm rather than the total amount raised by YouTube which was $11.5 ($3.5 first round, $8 in the second).

The second challenge in a book like this is to pick 50 companies. Holland and Ross also had to find a balance between Australian and International companies. That have met this challenge by using the word "Great" rather than "Best" to define the entrants. That lets them get away with some quirks such as including the small scale independent property service Stayz (that Fairfax bought for $12mm) on a list that includes super-heavy weights Google, eBay and Amazon and start-up A-list 2.0ers like Facebook, Digg and Twitter.

A number of travel players get a mention - Webjet, Stayz, Kayak (no Sidestep) and Wotif.

Book is well research, with Holland and Ross gaining access to inside knowledge on every company profiled. This made the story behind the companies profiled intriguing as well as being well written. You can get a copy here on Amazon "Available where all good books are sold".

Disclosure - was provided with a copy of the book at no charge but was not obliged to profile positively or at all.

Sunday, December 09, 2007

Which planet is Lonely Planet travelling on?

Poor old Lonely Planet - first they missed the Internet revolution and then they had to throw in the towel and sell out to the BBC. But we always assumed that their strengths would hold true. That their editorial standards and world knowledge would give them a permanent place in the travel industry no matter how powerful the wisdom of the crowds became. Now they seem to have misplaced a global city in this article from the Saturday Sydney Morning Herald - look at the title calling Rio de Janeiro the capital of Argentina.

There are of course two punchlines to this story. As those of you who submitted to the torture of watching the sequel to I Know What You Did Last Summer will remember (or used other less convention means for studying geography) even if Lonely Planet had put Rio in the right country it is not a capital.

Of course we can assume that since Lonely Planet has remained in non-US hands that they will at least get it right that Europe is a continent not country and Budapest is the capital of Hungary.

Friday, December 07, 2007

David Saunders gets Acting MD gig for Galileo Pacific

Congratulations to David Saunders who was appointed as the Acting MD for Galileo in the Pacific region while current boss Shelley Beasley is on maternity leave.

Saw the story in Traveltoday

WHOOT: Acceptances have slowed and Wotif needs more time

WHOOT series update - WHoever Owns Outright

In our last instalment of the WHOOT, all seemed rosy for Wotif in its bid for The acceptances were flooding in driving the Wotif stake to 58% with 18 days to go. However in the last week the acceptances have slowed. On December 5 we had a filing for 59.2% and December 6 for 59.74%. Later on December the 6th Wotif tells us they are extending the deadline for acceptances from December 17 until January 11. AOT is still holding on to 19% which means that Wotif needs practically every other shareholder to accept to reach the magic 75% required. This ain't over yet.

Wednesday, December 05, 2007

Tips from the T-List book now available

Mathieu of radaron started the T-List back in March. In a whirlwind of linking it took off. I posted a version with my top list here. Kevin at Travolution posted his Recommended List here. Now through the efforts of some of the top industry bloggers and journalists, the Tips from the T-List book is here.

I have three entries in the book:
More background on the book here. Key people in production of the book were
You can download a low res copy of the book here.

The best URL for the book is here including information on how to order hard copies

Monday, December 03, 2007

Zuji is dead. Travelocity Lives (in NZ at least)

Back in August last year we saw a new logo for Zuji in Asia Pacific. Important elements were the Travelocity "stars" and font and change from "powered by Travelocity" to "A Travelocity Company". At the time I said that
"you could even start a long odds bet that Zuji will change its name - at least in AU and NZ"
It has taken a while but I have now been proven half right in that long odds bet. News today (from Australian TravelWeekly) that the Zuji NZ business will now be rebranded This follows the termination of the New Zealand relationship with Stella. Is the right step and overdue. Even though Zuji Australia boss Pete Smith says there is no intention to change the AU name, I am sure it is only a matter of time.