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Expedia, Travelocity and Orbitz Facing New Competition
 from Heavyweights - Google, Yahoo and AOL
By Aman Batheja, Fort Worth Star-Telegram, Texas
Knight Ridder/Tribune Business News

Nov. 12, 2005 - The big three online travel sites -- Expedia, Travelocity and Orbitz -- are facing new competition from another trio of Internet heavyweights.

Google, Yahoo and AOL have all recently beefed up their travel offerings, bidding for customers who typically click on a travel site to book airfares or hotel rooms.

Google made its venture into travel search in mid-October with a new flight feature incorporated into its main search engine.

Type in any two cities on Google's home page, and at the top of the results page, you'll likely see links to travel sites selling flights between those two cities.

A Google spokesman declined to say which travel vendors are participating in its search feature or how they were chosen. But several searches brought up links to four vendors: Expedia, Hotwire, Orbitz and Priceline.

Joel Frey, a spokesman at Southlake-based Travelocity, wouldn't comment on whether Google approached his company about its flight feature.

"We, too, have read about what Google is testing and will continue to monitor them very closely, but that's all we have to say at this time," Frey said in an e-mailed response.

Expedia is the most prominently displayed vendor in Google's new flight feature, showing up in two different links for every travel search on Google.

Katie Deines, an Expedia spokeswoman, said Google informed Expedia about the flight feature before its debut, but that it was Google's decision to highlight Expedia's fares. Expedia was not paying Google for inclusion in the flight feature, she said.

Henry Harteveldt, a travel industry analyst with Forrester Research, said he had trouble believing that Google has given Expedia such prominence on its new feature without anything in return.

"I believe that somehow Expedia negotiated this as part of their advertising," Harteveldt said. The largest travel sites are already paying advertisers on Google.

Google's successful track record has many expecting that its flight feature will be just the beginning of a deeper entry into the travel market.

"When it comes to search, there's Google and there's everybody else," Harteveldt said. "If you're not on the shelf at Google, you don't exist."

While it may be a while before Google's effect on the travel market is truly felt, recent maneuvers by Yahoo and AOL may have a more immediate impact. Both Web giants have expanded their travel sections recently, aiming to direct consumers to the cheapest travel deals from a host of popular vendors. The plans may spell trouble for Travelocity, which spends millions on being the main travel search engine for both sites.

"There's no question that Yahoo and AOL are both positioning themselves to do business with or without Travelocity as a search partner," Harteveldt said.

In the last year, Yahoo and AOL both began offering access to what's called a meta-search engine, which searches several travel sites and directs users to the best deals. Yahoo's service, at Farechase.com and AOL's PinpointTravel.com, searches airlines' and hotels' sites directly for most of their results. Neither is able to search Travelocity's fares.

"We've been very adamant in our stake against them," Frey said, referring to meta-search engines.

Frey said Travelocity doesn't like how those engines sacrifice customer service for rock-bottom prices.

"Yeah, they'll book the low fare, but if you have any problem once the booking is made, they're not going to help you with it," Frey said.

Phil Carpenter, a spokesman for Sidestep.com, another meta-search engine, said sites like his were not trying to be travel agencies. The companies their customers buy from can handle any problems, he said.

"Why do you need Travelocity in the middle to serve as a mediator?" Carpenter asked.

Frey said Travelocity is focused on enhancing the traveling experience. He pointed to recent arrangements with companies like Apple and Blockbuster to offer Travelocity customers special deals. Someone planning a trip to New York, for instance, may receive an e-mail with discounts on songs well-suited for the trip from Apple's iTunes site and appropriate movies from Blockbuster.com.

It may prove to be a smart strategy in the long run. Jay Campbell, editor of Business Travel Beat, a travel information publisher, noted that online travel offerings from the likes of Yahoo and Google may impact consumer travel, but business travelers won't be impressed.

"I think the real kind of action in the industry is on the business travel side where customers are asking for extra features and services," Campbell said.

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To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to http://www.dfw.com.

Copyright (c) 2005, Fort Worth Star-Telegram, Texas

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