Summer reading


The dog days of August are here. So with the temperatures and humidity on the East Coast soaring and the news wires slowing a bit, I started rifling through old clips -- archived Web pages, actually. I was curious about how various stories had turned out, looking to rediscover the plot twists.

In 2001, I traveled to Kfar Saba, Israel, to visit the technology headquarters of FareChase. Few Israelis had heard of the company, which was developing a "screen scraper," a travel search engine, to compete against then-metasearch leaders SideStep and Qixo.

But in the U.S., FareChase was starting to get noticed.

In tiny Kfar Saba, which borders the West Bank, groups of FareChase software developers, many of whom got their tech training in the Israeli Army, sat in their offices, working on a project for Orbitz. 

More important, they were figuring out ways to refine the FareChase search engine, which was pretty powerful and making a name for itself.

Other people noticed. In 2004, FareChase hit the big time when Yahoo bought it, a coup for the young company and its investors.

Yahoo, then the world's most visited Web site, moved FareChase's operations to Yahoo's headquarters in Sunnyvale, Calif.

The point: Yahoo integrated FareChase into Yahoo Travel along with Travelocity, travel guides, maps, user reviews, a trip planner, deals and photos of people who have visited Boston. There's a FareChase tab on the top of the Yahoo Travel home page, but amid all the clutter, it took me a while to find it.

I'm sure Yahoo can trot out some statistics about how many consumers use FareChase when searching for travel and how great it is for suppliers. But in my view, FareChase has been exiled to a sort of cyber Gulag, competing for space and resources with tons of other Yahoo properties and getting lost in the mix.

Has anyone told you lately that they checked prices for flights or hotels on FareChase before booking their travel? Or, if they are unfamiliar with the FareChase name, that they used the Yahoo price-comparison engine to research their vacation options?

It turns out that transactions that are good for investors -- in this case the people who put up the money to launch FareChase -- often are at great odds with a company's real value proposition.

FareChase would have had a better run if it had remained independent and further built its brand.

  " " "

With Travelport's acquisition of Worldspan looming next month, pending European Commission approval, there will be a lot of pain in store for the people who work for both companies.

The private equity folks of Travelport and Worldspan would have you forget that people's lives are being crushed by shareholder dividend deals and the "synergies" they are pushing through.

The Wall Street Journal reported recently on the decimation wrought by the Blackstone Group's buyout of Travelport a year ago.

Investors already have recouped their money, drained all the cash they could out of Orbitz Worldwide (which just went public), greatly increased debt and laid off about 10% of Travelport's employees.

Ten percent translates to 841 people and families who were thrown off the ship so the suits could enjoy their deals and their country club golf memberships.

Worldspan already has gone through years of downsizing and pink slips. But the new Travelport-Worldspan has much more cost rationalizing and employee firings planned.

Will Travelport be better off for it in the long run? Will it serve its customers better? I doubt it.

  " " "

One company that has thrived post-acquisition is TripAdvisor, which was gobbled up by IAC/InterActiveCorp in 2004 and now is owned by Expedia Inc.

By the way, has anyone noticed that TripAdvisor has become a prominent villain in the eyes of some in the industry who love to find a company to hate?

They blame the evil Internet for everything.

Is it so radical a precept to put forward the view that people who travel -- and not just the experts -- have something to contribute when they offer their views on hotels in user reviews?

Anyone who actually has checked out a hotel or destination in TripAdvisor before traveling will find there is a lot to be learned from "the people."

You can usually spot a fake review when someone gushingly praises a property or totally trashes it. But there is wisdom involved when you take into account that 25 other reviewers may have a similar slant, positive or negative, on a property.

In 2000, I wrote a story about TripAdvisor, then an unheralded, new company that was poised to funnel destination articles from travel guides and major newspapers to the GDSs and major Web portals.

Google News was just a pipe dream then, and I couldn't understand how TripAdvisor would get permission from all the publications it would access for content.

Well, TripAdvisor was deft enough to adapt to changing times and has been flourishing with its advertising and user review model.

The moral? Not every innovative start-up gets bought out by a giant only to fade away.


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