AOL, which has exclusively used Travelocity as its
reservations engine for AOL Travel since 1999, on April 1 renewed and expanded
the partnership for two years, with an optional third year.
The new agreement
evolves the relationship from an exclusive distribution partnership
to a strategic technology relationship, said Jeffrey DeKorte, vice
president and general manager of AOL Travel.
Travelocity will be AOLs exclusive, integrated online travel
agency, the provider of air, car, hotel, vacation package and
cruise for AOL.
The new pact also
will have Travelocity using its travel and technology expertise to
make AOL Travel more comprehensive by integrating editorial
content, user-generated reviews and blogs, personalization
features, MapQuest maps, RSS alerts and video.
We want to make a
way bigger bet on the travel category, and some of the things that
you need to make that bigger bet are innovative products that
Travelocity has added into their mix, said David Lebow, executive
vice president and general manager of AOL Media
The agreement also
gives AOL the ability to integrate its Pinpoint Travel
search engine beyond AOL search functionality and into AOL
Today, the AOL
Travel home page features Travelocity but has no mention of AOLs
Pinpoint Travel, the comparison-shopping engine powered by Kayak. (Travelocity
refuses to participate in most travel search engines because they
promote supplier-direct offerings and focus on low
will be integrated with AOL Travel soon, said AOL.
The next step,
DeKorte said, is a meeting of AOL and Travelocity officials to
determine how to expand the travel offering together.
initial agreement with AOL in 1999 required Travelocity to pay AOL
up to $200 million and share advertising and commission revenue.
But the agreement has been revised twice before this years renewal.
In 2005, the two sides established a formula where Travelocity
would pay AOL up to $13 million but less if AOL didnt meet revenue
AOL officials would
not comment on the financial terms of the new agreement.
Our incentives are
aligned on this to focus on selling more travel together, DeKorte
Of its two main
portal agreements, Travelocitys Yahoo agreement, under which it is the
exclusive air, car and hotel booking engine on Yahoo Travel, is
probably the more important in terms of volume.
year is obligated to pay Yahoo $26 million for advertising,
corporate services and a share of transaction revenue, although the
payment could be reduced based on performance.
purchased comparison-shopping engine FareChase in 2004,
has much more aggressively promoted FareChase than AOL has promoted
instance, has a button on top of the Yahoo Travel home page, and is
integrated elsewhere, as well.
Yahoo-Travelocity agreement expires Dec. 31.
reporter Dennis Schaal, send e-mail to [email protected].