ORLANDO -- Yahoo
took new steps Nov. 14 to give its FareChase comparative shopping
engine greater prominence within its travel offerings, putting a
FareChase tab on the Yahoo Travel homepage for the first time.
And, on the same
day, in a turnaround for FareChase, the Yahoo meta-search player
began searching the American Airlines Web site, AA.com, for schedules and fares, through a direct-connect using XML
technology.
Yahoos decision to
tighten the integration of FareChase into Yahoo Travel at http://travel.yahoo.com and elsewhere in elsewhere in Yahoo Travel came after Travelocity and Yahoo
renegotiated their contract in July.
Travelocity is still
the exclusive booking engine for air, car and hotel reservations on
Yahoo Travel, and the agreement was extended one year, until Dec.
31, 2006.
In addition to new
financial provisions, the revised agreement indicates that
Travelocity wont participate in FareChase and "Allow(s) Yahoo to
continue and expand in the travel search arena throughout the Yahoo
Network," Travelocity stated in an SEC filing.
Speaking at the PhoCusWright Executive
Conference here Nov. 14, Travelocity CEO Michelle Peluso said the
online agency today has become less reliant on the bookings it gets
through partnerships with Yahoo and America Online.
And, in an
interview after that speech, Yen Lee, Yahoos general manager of
travel, acknowledged that fact, but said Travelocitys business
through Yahoo is still growing.
Lee said Yahoo
always had the contractual right to integrate FareChase, but
discussed the matter with Travelocity in the interest of
maintaining good supplier relations.
FareChase doesnt
book travel, but refers users through free natural results and paid
ads to supplier and online agency Web sites for
bookings.
In a coup for
FareChase, it began searching Orbitz.com for inventory several weeks ago. All
of the meta-search engines, including FareChase, Kayak, SideStep and Mobissimo, strive to
access inventory in a comprehensive manner, but online agencies
like Travelocity and Expedia have declined to
participate.
Lee said the Orbitz
partnerships came through recent agreements with Cendant that also
provided access to Cendant hotel brands.
In addition to
placing a FareChase tab on the Yahoo Travel homepage, Yahoo also
put a FareChase button on the homepages of Yahoo
Travel Guides and Yahoo Shopping, where consumers can now shop for
travel along with computers, DVDs, holiday gifts and
flowers.
FareChase's access to AA.com started Nov. 14 despite the
fact that American sued FareChase for unauthorized scraping in 2003
before Yahoo acquired FareChase. The two parties settled that
litigation prior to Yahoo's purchase of FareChase in
2004.
FareChase accepts
paid ads, but its business model is to display the results in an
unbiased manner, allowing online agencies and suppliers to
participate in FareChase for free. So, for example, FareChase gets
no revenue from American when a consumer clicks on an American
flight in FareChase search results and books it on
AA.com.
However, FareChase
would be compensated if American pays for an advertisement on
FareChase, and a consumer clicks on it and books on the airlines
Web site.
Among the
meta-search engines, American now has marketing agreements with
FareChase, Kayak, SideStep and Mobissimo.
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 displays of all the flights
from one carrier at a time.
Results that were
previously displayed as far back as page 5 are now displayed on the
first page, Yahoo stated.
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.
To contact
reporter Dennis Schaal, send e-mail to [email protected].