Thursday, August 17, 2006

Good news in Seattle - is that bad news for others

In line with the re-launch of Expedia in Australia, Expedia has announced its recent results and the news is good. Profit up 30%, sending the shares up 13% (though there is still a long way to go to recover from the decline over the last twelve months). This is on the back of better than expected results from both Priceline and Travelocity. Suddenly after a period of bad news from the big guys we are seeing a turn around. During the bad news period, start-ups appeared all over the place receiving funding for niche areas such as group, site comparisons (Kayak keeps raising money) and mashup/airline fare searches. Red Herring even started covering travel regularly again.

Now the bubble talk has started again. GigaOM asks the question - are their too many travel start-ups?

This is also playing out in Australia - though on a smaller scale. Local player Webjet has money to burn and is growing nicely. Local first mover is improving quickly especially its operation of proving a huge success. Local leader Wotif has a mountain of money and huge brand reach. These local players are not yet challenged by the big guys but this is only a matter of time. Zuji has made a few marketing mistakes recently but has made a strong move it changing its branding to be more like its Dallas parent - I am betting on a name change within 12 months. Expedia is finally in Australia with a great looking product. Expedia first launched in Australia in 1997, closing six months later. New staff were appointed again in 2002 but it has taken years to settle the strategy and get the product right.

Watching this mini version of the huge battles in Europe and America play out is going to be great fun to watch.

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