ORLANDO -- Yahoo is
taking its travel page to the next level by beefing up the role of
its FareChase subsidiary to bring additional content to the site in
new ways.
FareChase, a
comparative-shopping engine that Yahoo acquired last year, now has
a tab on the Yahoo Travel homepage that takes users directly to the
travel search site.
Also, the
comparative shopping engine began accessing schedules and fares
from American Airlines Web site [AA.com] through a direct link using an XML
feed, ending a feud during which American tried to block FareChase
and other screenscrapers from accessing its site.
And in another
boost for FareChase, Yahoo reached an agreement with Cendant that
authorizes FareChase to search Orbitz.com.
FareChases enhanced
status on Yahoo Travel came about after Yahoo renegotiated its
agreement with Travelocity, which remains the exclusive air, car and
hotel booking engine on Yahoo Travel.
Metasearch
a bad word at Travelocity
Farechase doesnt
perform any bookings but links users to supplier and online agency
Web sites.
Still, Travelocity
views Yahoos foray into metasearch as competitive because some
consumers use FareChase to book directly on supplier Web sites
instead of on Travelocity.
Travelocity has
also eschewed the comparative-shopping approach to online travel
marketing, saying it makes travel seem like a commodity and
overemphasizes price.
The issue was a
factor in a contract renegotiation that Yahoo and FareChase
completed in July.
The revised terms
... allow Yahoo to continue and expand in the travel search arena
throughout the Yahoo network, Travelocity stated in an SEC filing.
Pursuant to this agreement, Travelocity has decided to not
participate in Yahoos FareChase metasearch model under either the
Travelocity or the Yahoo Travel brand.
The revised
Yahoo-Travelocity agreement extends the contract termination date
one year to Dec. 31, 2006. Travelocity said it would pay Yahoo $26
million for advertising and corporate services plus a share of
transaction revenue for 2006, although that payment could be
reduced based on performance.
Speaking at the
PhoCusWright Executive Conference here, Travelocity President and
CEO Michelle Peluso said the online agency today has become less
reliant on the bookings it gets through portal partnerships with
Yahoo and AOL.
In an interview
after that speech, Yen Lee, Yahoos general manager of travel,
agreed with Peluso but said Travelocitys bookings through Yahoo are
still growing.
In addition to
placing a FareChase tab on the Yahoo Travel homepage, Yahoo put a
FareChase button on the homepages of Yahoo
Travel Guides and Yahoo Shopping, where consumers can shop for travel
along with computers, DVDs, holiday gifts and flowers.
And, in another new
wrinkle, FareChase introduced a patent-pending collapsed-itinerary
feature for airline results. The feature displays five airlines
among the first five results, avoiding the problem of having flight
displays from one or two carriers dominating the first few results
pages.
Results that were
previously displayed as far back as Page 5 are now displayed on the
first page, Yahoo stated.
FareChase,
American on same page
The relationship
between FareChase and American, meanwhile, means that the airline
can avoid the burden of unproductive searches and can assert more
control over the way its flights are displayed through
FareChase.
Lee said FareChases
business model, in which natural search results (as opposed to
click-throughs from paid ads) are displayed in an unbiased manner,
helped in forging the partnership with American.
FareChase promotes
its paid-ads business, of course, but online agencies and suppliers
can participate in FareChase for free.
For example,
FareChase gets no revenue from American when a consumer clicks on
an American flight in FareChases natural search results and books
it on AA.com.
However, FareChase
gets a fee from American when consumers click on an American ad on
FareChase and then book a flight on the airline Web
site.
Among the
metasearch engines, American has marketing agreements with
FareChase, Kayak, SideStep and Mobissimo.
In a presentation
at the PhoCusWright conference, Lee explained that Yahoos plan for
FareChase is consistent with the Yahoo model, where the combination
of free search and paid ads has resulted in billions of dollars in
business.
Thats our vision on
FareChase, Lee said, referring to the mix of free results and paid
ads.
In a coup for
FareChase, it also began searching Travelocity rival Orbitz.com for
inventory several weeks ago.
Lee said the Orbitz
partnership came through recent agreements with Cendant that also
provided access to Cendant hotel brands.
To contact
reporter Dennis Schaal, send e-mail to [email protected].