Technology Israeli developers to help agents 'fare chase' The FareChase comparison shopping engine performs multiple searches simultaneously on some 100 agency, portal, consolidator, airline, car rental and hotel sites and facilitates bookings at the source sites. By Dennis Schaal / August 16, 2001 Share 1 -- KFAR SABA, Israel -- They speak Hebrew and English here, but also Java and XML. In a modest second-floor office on Hata'as Street in this midsize town in central Israel -- a few miles from the occupied territories -- about a dozen or so FareChase software developers fine-tune the company's Web data-mining technology, hoping to produce some nuggets for the U.S. travel industry.The workplace, with its project teams and casually clad employees, resembles any U.S. dot-com, although there are cultural nuances.No one thinks twice, for instance, about the programmer who packs a pistol, a requirement of his commute to and from his settlement home in the West Bank.Despite the distance from the company's target market, names like Expedia, Galileo, Travelocity and Worldspan seem as familiar to members of this research and development team as hummus and tahini.Founded in late 1999, FareChase, a U.S. corporation, has a management and marketing team in New York and the 20-member research and development team here.The inspiration for the business grew out of company president Lior Delgo's work for Magic Tours and Travel in New York in the late 1990s.As he scoured the Web for hotel deals, he said he realized that a comparative shopping engine in the travel industry would fill a market need.But shopping bots for travel products face technical challenges largely absent in other markets because of the dynamic nature of pricing and availability. That's where the Kfar Saba staff comes in.The development of FareChase's technology indirectly grew out of some of the staff's experiences with large-scale computer systems in the Israeli Defense Forces' intelligence corps, said chief technology officer Ofer Shaked, who runs the research and development team.The FareChase comparison shopping engine performs multiple searches simultaneously on some 100 agency, portal, consolidator, airline, car rental and hotel sites and facilitates bookings at the source sites."Each server machine [handles] roughly 10,000 users intensively accessing the travel Web sites," said Shaked, who jokingly refers to himself as the company's "foreign minister" because of his frequent Israel-to-U.S. jaunts.FareChase believes its technology stands out from the competition because it is better suited for high-volume applications where speed makes the difference, said Boaz Behar, vice president of research and development."We're not saying the competition will vanish," said Behar, who founded the company with Delgo and Shaked. "We have a solution that enables us to be better in the more important places, where the volume goes."That's why the company, in pursuing a business-to-business strategy rather than a business-to-consumer approach, is pushing hard to develop licensing deals with CRS companies, online agencies and portals.Agents are pressuring the CRS companies for access to the Web fares and negotiated rates that consumers can readily book on Orbitz, supplier and online agency sites, FareChase officials said. Using the FareChase engine, they added, agents on CRSs would be able to book those Web fares and charge clients a service fee.In addition to the comparative shopping engine, FareChase has developed a second application -- a business intelligence tool for airlines and online agencies that enables them to do statistical analyses and automate the monitoring of their competitors' pricing for revenue and yield management purposes.Orbitz has been using this tool on a pilot basis to track how its pricing for 100 domestic city pairs compares with fares on the sites of its airline owners as well as on Expedia and Travelocity.An Orbitz spokeswoman called the FareChase technology "a unique tool" that helps Orbitz determine "how we stack up to the competition in producing the lowest fares."The FareChase technology is one tool in Orbitz's arsenal to monitor compliance with its partner contracts or to figure out why a fare on American Airlines' site, for instance, is not showing up on Orbitz, she added.FareChase officials said its business intelligence tool is attracting interest from several airlines, although the company's greatest "upside" lies in licensing the comparative shopping engine to CRS companies and major Web players.As a startup that released its fully functional product only four months ago, FareChase has yet to strike the major deals that would ensure sustainability, although officials said several are close.The company started with $1.4 million in venture capital from private investors. In February, Deutsche Bank Private Equity Fund led a $5 million round of financing, providing $3 million itself and heading negotiations for the balance.Farechase claims to have a relatively modest burn rate of $200,000 a month -- with no advertising budget because it is not targeting consumers."FareChase was smart to migrate its business model from a [consumer] shopping bot to a technology provider," said Henry Harteveldt, a senior analyst at Forrester, an Internet research firm. "It remains to be seen what kind of traction they get with the GDSs and airlines."FareChase Fast Facts• Technology: Web automation software that conducts large-scale parallel searches of multiple travel sites.• Applications: Comparison-shopping engine that searches 100 online agency, portal, consolidator, airline, car and hotel sites for the best deals, including Web fares and negotiated rates. Bookings take place at the source sites.A business intelligence tool that enables airlines and agencies to track competitors' Web site pricing to automate revenue and yield management.• Strategy: Pursues a business-to-business strategy, seeking to license comparison shopping engine to CRS companies, e-travel providers and portals. Targets airlines and travel sites for its business intelligence tool.• Deals: Co-branding and revenue-share agreements with travel franchise company Etravnet.com and Hotbar. Affiliate contracts with 25 travel sites, including Hawaiian Airlines, 1-800usahotels.com and Uniglobe.com.Firm's engine speeds past competitionIn terms of response time, FareChase leaves competitors Qixo and Sidestep in the dust, lending credence to FareChase's claim that its Web-scraping technology is better suited for the mind-numbing volume that would be generated through a CRS platform.In a recent test, all three companies' search engines returned a low Web fare of $195 from US Airways for a Tampa, Fla.-Seattle roundtrip from Aug. 25 to 27 with one stop each way. But the difference was speed.At www.farechase.com, the company's demonstration site, the results came back in 15 seconds.In what could be considered an Internet eternity, www.qixo.com took 65 seconds and the Sidestep browser plug-in returned results in 75 seconds.The three companies have different business models, with Qixo and Sidestep being more consumer-oriented than FareChase, although Qixo and Sidestep (which markets itself as a better Orbitz) both offer co-branding programs as well.Boaz Behar, FareChase's vice president of research and development, explained that the company's technological staff initially hesitated entering the travel market because they thought the technology would be too easy to develop -- and therefore copy. But they soon realized that travel industry challenges contrasted sharply with other markets, where databases of inventory can be updated off line."Due to the dynamic nature of the prices and availability, a periodical update must be done every couple of minutes," Behar said. "You need a huge database given the infinite amount of products multiplied by the number of Web sites."With its probing of some 100 Web sites, FareChase's technology simulates a user searching those sites simultaneously, he said."Imagine your computer running over 100 Internet Explorers at once," Behar said. "We have created technology that enables us to simulate more than 6,000 browsers in a single, regular-strength server."