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