Friday's Travel InsideOut

Hold onto your hats because Microsoft's take in the Yahoo deal may be less than meets the eye. And, anyway, as travel advertisers mull the value proposition, does anyone know how to spell d-i-s-t-r-a-c-t-i-o-n?

Advertising Age: Sorry, Microsoft Will Not 'Own 30% of the Search Market:' Now that the Yahoo deal is finally done, many observers seem to think Microsoft's new search business will be just like Google's -- only a bit smaller.

Specifically, they think that Google has 65% of the market and Microsoft will have 30%, so Microsoft's search business will basically be half the size of Google's. Read more

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TripAdvisor, like everyone else, realizes that organic is the trend in almost every supermarket that you see, but does it translate into a tasty growth strategy for TripAdvisor Flights?

Dennis Schaal Blog: TripAdvisor Answers Back, Infers Fly.com Who?: Brian Saltzburg, a former Travelocity guy who is general manager of new initiatives at TripAdvisor, took great umbrage at my post yesterday, Fly.com Toe-to-To With TripAdvisor Flights. Read more

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Orbitz Worldwide’s ebookers re-upped with Amadeus through the end of 2012 for global distribution system (GDS) services, complete with the usual array of incentive agreements and shortfall penalties.

Securities and Exchange Commission Item 1.01. Entry Into A Material Definitive Agreement: On July 28, 2009, ebookers Limited, a wholly-owned, indirect subsidiary of Orbitz Worldwide, Inc. (the “Company”), and Amadeus IT Group S.A. (“Amadeus”) entered into an amendment (the “Amendment”) to the Global Access Agreement, dated January 1, 2004 (the “Agreement”), extending the term of the Agreement to December 31, 2012. Under the Agreement, as amended, Amadeus provides certain of the Company’s ebookers websites with access to travel supplier content, including air, hotel and car reservation information. The Company receives incentive payments based on the number of reservation segments it processes annually through Amadeus. Read more

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So, with its bid for Frontier Airlines, Southwest Airlines not only would cross a new frontier with a bunch of additional routes, but an acquisition could also be a big headache for United Airlines.

USA Today: United, beware! Southwest's bid for Frontier spells trouble, analysts say: United, beware. That's what several industry observers are saying after yesterday's surprise announcement that Southwest would make a bid to acquire Frontier Airlines. If its bid is successful, Southwest's acquisition of Frontier would eliminate a pesky competitor and give it access to new domestic and international routes Southwest does not currently fly. Still, "the biggest impact of Southwest’s potential bid to buy bankrupt Frontier Airlines may fall on United Airlines," writes Scott McCartney, "The Middle Seat" columnist at The Wall Street Journal. Read more

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Segmentation and re-packaging are the names of the game, as Rentalo.com evidently believes with its launch of three lodging websites with varied twists.

Arthur Frommer Online: Rentalo.com Creates 3 New Websites to Deal With 3 Kinds of Accommodations: Time was when international travelers made their lodgings choices from among either hotels or guesthouses -- nothing more. That process of selection has apparently become far more complex, and the big accommodations website, Rentalo.com (www.rentalo.com), has this week split its internet services into three different categories of housing. Though they have retained an overall website of all their products for those who can understand it, they have created three different subsidiary websites, each one containing several detailed groupings of accommodations that fall under each of the three headings. So if you're still able to follow me, here are the three new websites for you to consult, apparently an improvement on the former single site. Read more

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Travel InsideOut is a Dennis Schaal Blog daily feature. Get a thorough-going look at the day's travel industry top and tangentially interesting stories. Feel free to comment on them below.

Travel InsideOut is Copyright (c) 2009 by Dennis Schaal. All rights reserved.

GDS Full-Content, Twitter Metasearch, Southwest, Expedia, TripAdvisor

Some random, but hopefully logical thoughts, about travel distribution issues on a Friday morning [EST].

GDS Full-Content and Social Media: I've written in Travel Weekly how GDS full-content is a sham these days, given the airlines' full-throttle approach to introducing optional services. Although the airlines are testing filing these products with ATPCO, many of these services are still the exclusive offerings of airlines' websites.

So, it occurred to me that Twitter, too, already is further disintermediating the GDSs and travel agencies, or at least giving airlines a speedy and effective tool to go direct to their customers. The number of special fares and promotions that you can find on Twitter, with the airlines funneling consumers directly to their websites for inventory that often is unavailable in the GDSs, is numbing.

Twitter Metasearch: And that brings me to Twitter Metasearch, an application that a developer somewhere already must be fine-tuning. In the social media realm, we already have ExecTweets, a service that aggregates the tweets of CEOs and other C-Suite executives.

So, someone should create an application to aggregate all of the promotions and special offers on Twitter by industry vertical.

We might call the travel vertical on Twitter, TwitYak or KayTwit. You choose.

But, an aggregation of airline and other travel promotions like Priceline's now-ended $50 hotel-coupon offer and Connect by Hertz's one-year free membership offer for Twitter followers, would be a winning proposition.

Southwest, JetBlue, United: Speaking of airlines, some obviously understand social media and others are in the early stage and are coming up short. In her podcast on the IAG Blog, social media consultant Susan Black reminds me of an anecdote that Southwest founder Herb Kelleher recounted at the recent TravelCom conference in Atlanta. Kelleher said Southwest indeed is active on Twitter and sees it in part as a customer-service vehicle.

He said Southwest has seen a drop-off in the number of customer complaints to the Dept. of Transportation because Southwest has been able to deal with these issues directly with customers through Twitter.

Meanwhile, I took a look yesterday at JetBlue's tweets and compared the volume to those of United Airlines, which admittedly has dabbled with Twitter only since mid-March. JetBlue had 11 tweets yesterday, and United had a mere 14 in total since March 18. C'mon United. Jump in! This is an opportunity to improve the image of your brand, which could use some improving.

Expedia: Here's some interesting information about Expedia as it assesses what do about the $6 million per month impact from its eliminating or reducing, respectively, its air- and hotel-booking fees.

Expedia's booking-fee nixing terminates at the end of the month, and most people think the online travel agency will extend it.

It turns out, Expedia tells me, that its points of sale in Germany, France, New Zealand and India, as well as sister company Hotwire, also offer flights sans booking fees. Expedia.de in Germany eliminated its air-booking fees in April, although Expedia says the actions by its global points-of-sale did not take place in the context of a broad, coordinated initiative.

Well, according to Expedia's latest 10-Q filing, it gets 15 percent of its global revenue from airline tickets and 60 percent of its total revenue from transactions involving hotel sales. So, it is easy to see why eliminating the fees on air is less of an issue for Expedia than trimming its hotel fees, a move it made in reaction to an Orbitz initiative.

And, in the SEC filing, Expedia notes that it is trying to diversify its offerings beyond air and hotel by expanding its "car rental, destination services, cruise and other product offerings."

For years, online travel agencies have been bent on diversifying beyond air and into hotels, and now the pressures are coming to bear on the hotel business, so Expedia, at least, is looking to more fertile pastures.

It indeed would be ironic if analysts start berating the OTAs in the coming years that they are too dependent on the hotel business.

And, Expedia also concedes, in a way, a point that Forrester Research analyst Henry Harteveldt has been hammering home as of late: That the OTAs have fallen down on innovation, with each almost resembling a clone of the other.

Expedia states: "Differentiation among the various website offerings has narrowed dramatically in the past several years, and the travel landscape has grown extremely competitive, with the need for competitors to generally differentiate their offerings on features other than price. Newer competitive entrants such as “meta search” companies have in some cases been able to introduce differentiated features and content compared with the legacy online travel agency companies..."

Notice that Expedia refers to "the legacy online travel agency companies." I haven't heard that term used before in reference to the OTAs.

Are the OTAs getting to be "old school" with the metasearch engines and companies like TripIt and TravelMuse passing them by?

TripAdvisor: Part of Expedia's diversification efforts include hitching its star to TripAdvisor's global media business.

In the first quarter, the revenue of TripAdvisor, which just launched in China, grew 19 percent to $86 million. And, its OIBA (Operating Income Before Amortization) climbed 36 percent to $48 million.

With those kind of margins for TripAdvisor, this seems more like a Fat Tuesday than a random-thoughts-Friday.