Monday, April 28, 2008


I had the opportunity to attend the Dow Jones Wireless Innovation Conference last week in Redwood Shores, CA. The event is primarily designed to connect new mobile start-ups with funding, but the show had some interesting panels where today's hot mobile topics where debated (e.g. open systems, Internet devices, LBS). More on panel discussions coming soon in later blog entries. There were some interesting companies showcased at the event.

I had the pleasure of meeting Patrick Payne CEO of a new Vancouver BC start-up called Quickmobile. The company has developed a mobile marketing platform specifically designed for the global travel and tourism industry. The application enable the delivery of coupon offer to the traveler.

I was very impressed with company's capabilities and approach. Offers that are received are personalized, relevant, timely and valuable to the consumer sent on an opt-in basis only. Quickmobile was able to show how an SMS message can be sent that when accepted sends a bar coded coupon to the user. How can this be used? Here are just a few examples:

  • Hoteliers - could use this method to send coupons for hotel services such as a discount at the restaurant, bar or spa to promote on property services
  • Travel Management companies or leisure travel agents can promote "long tail" services (restaurant discounts, activity promotions) to increase loyalty and add to traveler convenience.
Mobile advertising will explode over the next few years. The key to mobile promotional campaigns is giving the consumer control over what they receive and making sure the offer is relevant. Quickmobile understands this need and is a company to watch.

Friday, April 18, 2008

Microsoft acquires Farecast

Yesterday's disclosure that Microsoft had acquired Farecast was a surprise to many in the travel industry. Is this a new online travel initiative from the original creators of Expedia? Will Farecast be integrated into Microsoft's Live Search?
First a bit of background. I was first introduced to Oren Etzioni through my client
Fetch Technologies. This was back in 2002 when the company was called Hamlet. The founders of Fetch are well recognized experts in AI as is Oren Etzioni . I have to admit that I was a bit skeptical during my initial discussion with Oren on whether a predictive fare model would be embraced by the travel consumer. My next interaction with Oren was at a PhoCusWright Travdex conference in Dallas back in 2005. My colleague and friend Philip Wolf commented to me that Oren's presentation at Travdex was the most technical he had seen. This presentation helped reinforce that Farecast was more than a service that tracked historical fares to recommend a buy or no-buy decision. The algorithms created by Mr. Etzioni use advanced AI technology to look at historical fare history creating a recommendation based on complex data mining techniques. It is my belief that this is the core value recognized by Microsoft and thus triggered the acquisition. I doubt if Microsoft is interested in becoming a major travel player, but I do anticipate that the Farecast technology will be expanded to other non-travel segments and incorporated into Microsoft's Live Search. Of course things could change if the Microsoft/Yahoo deal went through as Yahoo! has many travel properties including Farechase which was the first meta-travel search engine.

Monday, April 07, 2008

Travelport and G2Switchworks

On Friday April 4, 2008 Travelport announced that they were acquiring from G2 Switchworks "certain software assets and intellectual property to be used in the development of a future Travelport agent desktop solution." Given all the hype of GDS verses GNE over the last four years, what does this deal mean to alternative distribution?

There are a number of ways to look at this announcement.

  • The need for a multi-source desktop- G2Swithworks recognized from the start that to be successful as an alternative distribution platform they would need to provide travel agent call centers with a new multi-source desktop that could mirror the multi-source nature of self-booking applications and sites. Over the last four years G2 has worked hard to develop this platform. Despite this effort, though travel management firms (TMCs) particularly the second and third tier TMCs, have tested the G2 platform, few have actually signed up to run their entire agency using the desktop application. One reality is that despite the drop in financial assistance from the GDS to the TMCs, this type of monetary compensation for larger TMCs still exists. With economics playing a role in keeping the GDS as the platform for the TMC, G2 found that having a better more intuitive application was not enough to develop the necessary beachhead customers to be successful.
  • A recognition that current solutions do not provide the right platform for TMCs going forward - On the Travelport side, with the acquisition of Worldspan last year, Travelport not only had agents on their Focalpoint/Viewpoint desktop but also inherited the Worldspan's GO! point of sale solution (POS). The announcement to acquire the G2 POS is confirming that neither of these long standing agent desktop applications can truly support the multi-source and workflow needs of today's modern TMC agents. A simple but often overlooked aspect of the G2 platform is the housing a more robust traveler profile outside the GDS. This is a critical requirements for any truly multi-source platform. An GDS-independent profile should allow the airlines to target specific customers with dynamic offers representing their value as a customer, a clear part of the unbundling effort.
  • Eliminating a potential competitor: By acquiring G2, Travelport may simply be eliminating a potential competitive platform that would put pressure on the GDS/Airline negotiations when they are set to expire in 2010/2011. In addition, the Travelport action may be designed to prevent Sabre from acquiring the G2 platform. A bit of history of the GDS might put this into a different perspective. Back in the early 1980s at that time Apollo (the domestic GDS that is now part of the Galileo brand) licensed a travel agent back office system from an independent firm called ADS. The goal was to expand Apollo's offerings to travel agencies by becoming the chief provider of back office accounting software. After this announcement, Sabre, Apollo's chief competitor, bought the ADS company and incorporated it into their agency solution essentially trumping the licensing deal. This scenario was repeated in the late 1990s after Galileo licensed the GetThere corporate booking solution, Sabre turned around and acquired the company. With both G2 and Sabre now both owned by the Texas Pacific Group perhaps Travelport perhaps was simply heading off another potential competitive effort that would have again allowed Sabre the upper hand in a new platform initiative.
The G2 approach further reinforces the concept of a shift of aggregation to the TMC from the GDS. Today even with content agreements with the major airlines, no GDS has total content as some low cost carrier (LCCs) and Web only content still exists.

So what does this mean for the big picture of alternative distribution? I have repeatedly stated my belief that the GDS are not going away. The role of competition often is to accelerate development outside the constraints large companies. With perhaps the exception of Apple, few companies innovate due to the dysfunctional nature of large corporations. Time and time again, particularly here in the Silicon Valley, small start-up create innovative applications disrupting the market. When the disruptor is acquired, the larger organization can benefit from the start-ups innovation. I see the G2 acquisition by Travelport as an important evolutionary step in travel distribution, providing the market a much needed robust multi-source platform for TMC agents.