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Kayak Betting on Travelers' Desires,
Not Advertisers or Commissions

By Rob Varnon, Connecticut Post, Bridgeport
Knight Ridder/Tribune Business News

Mar. 20, 2005 - --NORWALK -- doesn't sell kayaks -- it's a travel Web site founded by some of the same people who created Orbitz, Travelocity and Expedia.

Dana Galin, Kayak's vice president of communications, said the founders picked the name because a kayak is navigable and takes people places, which is just what they want their Web site to do.

The name is also short and catchy and doesn't get lost in a sea of names with travel in them, said Steve Hafner, the company's co-founder and chief executive officer last month, two weeks after the site's launch.

The difference between Kayak and other sites is that Kayak attempts to deliver results for airfare, hotel and rental car searches based on users' desires, not on who advertises on the Web site or pays a fee to his company, Hafner maintained.

Hafner said some travel sites cut deals with particular airlines and only show the flight results for those airlines, or agree to give those airlines preference by listing them at the top of search lists.

Some travel sites get a commission from airlines or hotels when people book tickets or rooms through that particular Web site, which can also limit the number of results found during a search, he said.

Hafner said the airline JetBlue does not want anyone coming between it and its customer so it doesn't allow other Web sites to sell its products. Consequently, JetBlue may not be listed on other Web sites, he said, so its fares won't show up on a search. A search on Kayak, however, will return JetBlue results.

The company, unlike other travel sites, does not actually sell the tickets; users have to go to a travel provider's site for purchase.

Kayak also wants to maintain independence by not actually selling the tickets. Hafner said he wants to remain objective, so the site allows customers to write reviews of trips for other Kayak users to read.

So how will Kayak recover the money that Hafner and his partners invested?

Hafner said the Web site sells advertising and for each click on an ad, the company gets paid.

Two other elements may also make Kayak unique -- its founders are second generation travel Web site business people and they're using new technology, he said.

Hafner, at 36, appears to be young for a CEO, but within the Web travel business, which is just now about a decade old, he's an old hand.

He was vice president of consumer travel at Orbitz, which he helped found in 1999, he said. Terry Jones, Kayak's chairman of the board, helped found and served as its president and chief executive officer. Greg Slyngstad, a board director, helped found while working at Microsoft. Paul English, Kayak's co-founder and chief technology officer, was a vice president of technology at Intuit Inc.

Hafner said the group is looking to take Web travel a step further than they did in the 1990s.

In 1999, travel sites accounted for 6 percent of all bookings, he said, while today they account for 25 percent. Online travel is currently a $55 billion a year business, he said, but Kayak executives are banking that it will grow to $100 billion in three to four years, if they can eliminate what they think is the biggest deterrent of booking on line -- frustration.

People are frustrated with having to punch in information on several different sites in order to comparison shop and Kayak will eliminate that, he said.

He also said the group understands that people don't like waiting for a page to load and reload if they make adjustments to their searches, such as time of departure.

Kayak's Web site uses new technology that, after generating an initial search, allows a user to make adjustments without reloading the page. The information just changes to reflect the new criteria.

Dawn Barson, a principal of Think Creative Group in New Haven, said Kayak's success will most likely depend on how well it markets itself, even though it appears to have a good simple design and uses better technology.

TCG started as a Web design company more than seven years ago, but has grown into a marketing firm, Barson said.

Barson said Web site designers have learned that people want ease of use and don't want the computer screen cluttered up with information they don't need. She said travel sites were slow to come to this realization, which might give Kayak a good chance of success.


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