Ctrip makes very strong hints that looking for acquisitions

Day for a Ctrip double post. A few movements ago a link to a Tom Botts post from a presentation by Ctrip CFO Jane Jie Sun. Now I have just spotted a Reuters/Yahoo! Finance news story that Ctrip are planning to place 5.7mm American Depositary Shares (currently priced at around $36). In non-finance English this means they are looking to raise somewhere around $200mm in capital. What do they plan to do with it? The Reuters story says they plan to use the money to buy or invest in "complementary businesses and assets" and for general corporate purposes. In non-finance English "complementary businesses and assets"means buying some one. Ctrip plus $200mm equals consolidation. Speculation time....who do you think they are most likely to buy?

Steve Sherlock of Oodles: the search for funding and the deal with Wotif that almost happened

car rental search site Oodles is part meta-search, part travel agent and part loyal program deal search site. The classic meta-search part is the ability for consumers to search multiple sites in one go. The travel agent part is that Oodles collects commission on paid bookings (when customer pays car company) not on a per click meta-search basis. The interesting loyalty program part is that if you give your Airline or Car frequent flyer number to Oodles, then they will add to the search results specialist loyalty program deals. Means that a person who is both a Velocity frequent flyer (Virgin Blue), Qantas Frequent Flyer and Hertz Gold Club member will see an integrated display including special deals from Europcar (Virgin partner), Avis (Qantas) and Hertz as well as other deals from Thrifty. This is a great and - as far as I can tell - a unique offering in car rental and meta-search generally.

I was talking about Oodles today with Founder and MD Steve Sherlock. Steve and Oodles are in the middle of a search for a new round of funding. In a true web 2.0 fashion Steve is blogging his way through the experience in series of "diary of an entrepreneur raising capital" entries over at the anthill website. Included is a story about how Oodles was almost acquired by Australian online travel giant Wotif.com. It is an interesting series of diary notes and a recommended read.

I like the different angle that Oodles has taken from others. Allows consumers to see a display of a combination of inventory (loyalty program discounted and regular) that I have not seen on any other online travel site. Oodles already have the car rental traffic lead in Australia so appear to be executing well. The challenge for them is the constant start-up problem in Australia - finding the funding to continue to feed the growth.

WRI sold for $340mm, Nolan banks $100mm - TechCrunch

Thanks to Josh over at hostelmanagement for pointing me to the TechCrunch article confirming the terms of the WRI sale to Hellman and Friedman for $340mm netting boss Ray Nolan some $100. More at the post titled "Boo.com owner made $100m – but not from Boo". My original post on the sale plan is here. Latest financials for the business were (according to TechCrunch)

"Hostelworld was the cash cow for WRI, bringing in €18.3 million profit on revenue of €38 million from €350 million worth of transactions last year"

No wonder that Nolan's co-founder Fergal Mooney looked happy at PhoCusWright last week.

Google bought AdMob, Norm was right, the BOOT was wrong - time to eat humble pie

In my predictions for 2009 (back in January) I said the following

"2009 will not be the year of mobile for the travel industry: Every year since 2000 we have been talking about the mobile revolution in online travel. This year I rejoined that chorus of mobile revolution fan boys while at PhoCusWright in LA. With the Global Financial Crisis (I am told there is even an acronym for this - GFC) in full swing I think the larger players will pull back from their mobile plans and focus on core products, costs control and customer loyalty. Mobile will have to wait until 2010; and"

Many disagreed including Norm Rose, arguing that the proliferation of smart phones and mobile apps would prove me wrong. But I would not be talked out of it. In September I reaffirmed by prediction saying

" The argument in favour of my prediction is that bookings of travel via mobile phones apps (outside of Korea and Japan) are still very small and arguably inconsequential to the $150+ billion online travel industry. "

Here we are in November and I was looking forward to debating my position with Norm at PhoCusWright next week. But with barely a week to go before seeing Norm in Orlando, Google won the debate for him by buying AdMob for $750 million. AdMob is/was a Sequoia backed mobile display advertising platform.

This means that Google's third largest acquisition ever (after YouTube and DoubleClick) is of a company with maybe $40mm in revenue focused on putting adverts on iPhones, Android phones, smartphones etc. We now have a revenue model and distribution for advertising on the phone. Add that to the travel app bonanza on iTunes and elsewhere, the levels of smartphone penetration, augmented reality and more.

You got me Norm. I concede. Google has closed out the year with a big M&A deal proving that 2009 is indeed a year for Mobile. See you in Orlando for a piece of humble pie.

More on the deal read these two TechCrunch posts

• Google Acquires AdMob For $750 Million; and
• AdMob Is “Approaching $100 Million” In Revenues. Google Thinks It Can Be Billions

thanks to smiteme for the pie photo

Web Reservations International (WRI) up for sale for GBP 275mm (the Times)

The Times is reporting that Web Reservations International (WRI) is up for sale with a price tag of £275m.

WRI is owned by Ray Nolan and U2 Manager Paul McGuinnes. It operates

• boo.com - the former fashion/clothing site and poster child for the dotcom bust in Europe is now a meta-search company
• Hostelworld.com - online booking for hostels, backpakers and budget accommodation
  
• Hostels.com - more hostels and backpacker bookings with content
  
• Trav.com - more budget accomm including cheap hotels, motels, guesthouses, bed and breakfasts, youth hostels, holiday apartments, campsites, inns and lodges

The Times is saying that WRI has sales last year of €38m (£35m) and made a pre-tax profit of €18.3m.

thanks to joshhostels where I spotted the story first on Twitter and Hostelmanagement where he spotted it.

DealBase raises $1million in Series A funding

The deal hunting and publicising websites are appearing everywhere and launching in new markets constantly. In Australia alone we have had TravelZoo and Cheapflights rushing into this crowded and relatively small market.

News today that hotel deal/offer aggregation site Dealbase has raised $1 million in Series A funding from Russ Siegelman, an Affiliated Partner at Kleiner Perkins Caufield & Byers; Bob Zipp, Managing Director of Amicus Capital and Josh Hannah, General Partner at Matrix Partners and former CEO of eHow.com.

Dealbase.com was one of the BOOT pick's for the final six at the PhoCusWright Travel Innovation Summit. I chose it because it is has spent time and energy on the display layer. This has resulted in a great browsing and filtering experience generated by the common layout in terms of description, savings etc for each offer and deal. Makes it much easier for the customer to make the necessary comparisons. I am also very impressed by the self loading approach for hotels and inventory providers - at no cost. Is very different to the paid offer approaches of TravelZoo, Cheapflights and others. As with all these things distribution will be the key - especially if they get caught in an arbitrage traffic position where they try to buy traffic from Google at a price cheaper than they sell it to hoteliers. Are currently claiming a 100,000 visitors in March (puts into perspective my 3 years to get 100,000 visitors).

As a reminder here is the Dealbase.com pitch by CEO Sam Shank at the PhoCusWright summit.

VirtualTourist and OneTime cost Expedia $85mm according to Venture Beat

Eric Eldon over at the Venture Beat is reporting from an interview with VirtualTourist and OneTime founder J.R.Johnson in his post "No free lunch: The story behind VirtualTourist’s big exit, and Lunch.com".

For those keeping a track of the large number companies bought by TripAdvisor recently, VirtualTourist and OneTime were acquisitions nine and ten in year of frenetic activity by the Expedia owned Tripadvisor (yes...Expedia owns TripAdvisor:)).

Not sure how he did it (and he does not credit Johnson with leaking it) but Eldon has discovered that Expedia/TripAdvisor paid $85mm for the two companies. More back story to the transaction over at the full VentureBeat post.

Hat tip to HotelMarketing where I first saw the story.

Help Wanted part 2 - bringing talent retention to the recession

Exactly a year ago today I wrote a post called "Help Wanted: Finding staff in a Travel 2.0 world". The quick summary from that story was that in March 2008 it was almost impossible to fill an open head count role in the travel industry. My inbox at the time was full of job descriptions from entrepreneurs looking for referrals and notes from recruitment consultants looking for names...any name.

Now, 365 days later, saying that the world has changed is using a an over-used cliché because we have all run out of ways to describe a world economy in free fall. I could not find people to match to the opportunities because it seemed that everyone had the perfect job.

Now, my inbox contains a new email every day with a high quality resume. Top class BDMs, senior marketeers, product builders and more looking for roles after cuts and efficiency rounds. The only recruitment consultant contacting me with a job to fill (rather than a pitching for work) is looking for a role in a country that has banned Chianti, Chardonnay, Chablis, Chivas and all the other great "Ch" words.

Don't misread me. I am not turning against my own optimistic words from last September. There is no doubt that the travel industry will come through this and growth will return. But I am going to add a point to my comments from September. Initially I called the global f'n crisis (GFC) a chance for product/company innovation. I am adding to that that it is a moment for people/talent retention. If the CVs that I am seeing are an indication of the talent that is being let go then all in the industry need to take a moment and work first on retention plans during hard times rather than turning first to cutting and shedding.

thanks to Paul Photo Byrne on flikr for the photo

PS - need more proof of the GFC? China just announced a 20 million increase in the unemployment rate - effectively the entire population of Australia.

PPS - looks like my week long break from blogging lasted a day. Finally found some late night time to rejoin the blogerati.

TVTrip raises another €7 million. Total raised now almost $14mm

Hotel video review site TVTrip.com has just finalised their Series B round raising €7 million (first saw the story over at TechCrunch). Brings total raised so far to just shy of $14mm (depending on how you convert Euros to Dollars and not including initial angle rounds). Investors included Balderton Capital (portfolio includes Bebo) , Partech International (portfolio includes Dailymotion) and AGF Private Equity (portfolio also includes Dailymotion). The latter new to this round.

I get the video review space. I can see clearly how consumer conversion will increase based on better hotel descriptions and videos. What is not settled in my mind is how to do the perfect Video. Clearly consumers have short attention spans. We know that the length of the average video viewed online is less than a few minutes. We also know that consumers are looking mroe and more for content from actual guests/users/

There is thus a huge challenge in getting the right balance between supplying video but making it short, sharp, relevant and real.

At PhoCusWright in LA a Video back-end provider/production company TripTelevision (CEO Kulin Strimbu) waxed lyrically about their auto clip technology that takes short sections from a long vidoe and auto-compiles it into a 30 sec spot. So that in 30 seconds you can see a bit of the lobby, room, pool, restaurant etc. A click on the video at any time will take you to the longer version video devoted to that particular part of the hotel. TVTrip has approached with a sliding channel approach where options on which part of the hotel you want to look at are provided as different channels to select from.

Video is here to stay but these layout options need further work. TVTrip now have millions of dollars to spend on working it out (and keeping up with increasing broadband costs). Congratulations to CEO Marc Ruff and team.

Tripwolf Raises another $2.5 million from MairDumont and others

Yesterday TechCrunch noted that Austrian based online travel guide/planning site TripWolf raised another $2.5mm in funding. Leads (according to TechCrunch) are their current investor and media partner MairDzumont and Dieter von Holtzbrinck. My profile of TripWolf and their relationship with MairDumont is here. Congrats to CEO Sebastian Heinze and team.

Wow - HomeAway raises $250 million at a $1.15 billion valuation (TechCrunch)

Headline says it all. Wow. TechCrunch is carrying the whole story on this monster sized fund raising round for vacation rental company HomeAway. Makes money raised to date $459mm. TechCrunch state the pre-money valuation is $1.15 billion but does not say what the source is but remember that the biggest online travel company Expedia (EXPE) has a market cap currently of $2.38 billion. To give another example Google bought Youtube (top 5 site worldwide) for $1.65 billion. At first glance it is hard not to agree with TechCrunch's view that this is overvalued. What do you think is the vacation rental space hotter than first thought?

Publish Post

RedHerring likes tripJane at lot, TechCrunch 50 a little but I have not idea what they do

RedHerring is the tech boom magazine who's death keeps being reported and yet somehow managed to survive. Every now and then I check in on the online version to see what is happening. In keeping this week's (accidental) start-up theme at the BOOT, I came across the list of the Red Herring North America 100 from back in May 2008. This is their list of the top 100 start-ups in North America. Lots of good pedigree here as past winners include Google, Yahoo!, Skype and YouTube (with a little glitch around Netscape).

Much like TechCrunch50 I could only find one travel company on the list - tripJane. tripJane was also a finalist in the TechCrunch50 - being part of what they called the demo pit (ie not on the main stage but out in the foyer on a card table).

No details on the tripJane website on what they do. Something about social networking, purchasing and planning - which we have heard before. Here is the Crunchbase profile for a little more.

At lot of time has passed since the May RedHerring awards. Anyone out there from tripJane want to share with us what you do.

Promise next week to leave start-up land the get back to the more regular feature of this blog - whining about Qantas covering general industry trends.

Uptake - near perfect timing on the second round of fundraising

Last week I carried the story of UpTake taking in a second round of $10mm to bring total amount raised to $13.95mm. In original post I wondered aloud why they had needed to raise a second round so close in time to the first round. Unfortunately due to some overzealous spam filtering in my gmail account I did not receive a reply to this pondering from Uptake CEO Yen Lee in time before the story was posted. That said, it looks like Yen's timing on this round could not have been better. Uptake announced the raising on September 16. September 17 the Dow closed down 450 points or more than 4%. In other words it seems they managed to close the deal moments before the recent round of AIG and Lehmann led shocks that are almost certain to dry up start-up company investment funds. Companies post this dark week on Wall Street are going to find it much harder to raise money as investors hunker down and wait for more clarity (or queue up from free tax payer funds as part of the bail out bonanza!).

As to valuation - Yen below says that "the valuation was very fair" and "we didn’t necessarily need to raise the round ". This is usually code word for an "Up Round" (where the valuation is higher in Series B than Series A). But is doesn't sound like the valuation was dramatically increased.

Finally Yen is on the hunt for talent (see interview below for details). With money in the bank and people in under-funded business looking nervously at their bosses this should be a good time to recruit.

Below is a slightly edited version of my email interview exchange with Yen that should have gone with the original post. If you want some background here my earlier interview with Yen.

BOOT -Who joined the Round?

Yen - Trinity Ventures led the round and Shasta Ventures, who led Series A, co-invested. Trinity has been looking at online travel for many years without pulling the trigger but they were really excited about our business model and specifically how we would solve the consumer acquisition challenge. Specifically, how our technology approach allowed us to create an infinite number of niche pages (e.g. Monterey romantic hotels) to dominate the torso and tail on SEO.

BOOT - How much and at what valuation?

Yen- We aren’t disclosing specific terms other then to say we raised more then $10M. Referring in advance to my answer to Q7 below, we didn’t necessarily need to raise the round now, so the valuation was very fair.

BOOT - What are the plans for the money? What about international destinations and non-eng languages?

Yen - ... building a search application is not for the faint of heart – nor is it cheap! Especially since we make the investment to not just spider all the travel content we can find but also to structure it. Despite the strong progress we have made, we think we are just getting started, so most of the money will be for continued product development. We are absolutely committed to helping consumers globally with their travel decision making. We don’t know the specific timing of when we venture outside North America although we will have a better estimate by end of Q1, 2009.

BOOT - If people are part of the plans (ie recruitment) what are the main areas that you need to attract people? Has hiring become slightly easier recently with economy downturn?

Yen- Yes, headcount is the lion’s share of our expenses and will continue to be as we scale our offering. Are you offering me a soap box to help with recruiting? Then ... we are continuing to look for engineering talent. Specifically more problem solvers on each of our three technology layers. We need engineers with domain knowledge in spidering the web and mining unstructured data, natural language engineers with experience parsing text to extract sentiments, and data warehouse developers who have built multi-stage data processing pipelines. We also need engineers who have built ranking algorithms and contextual targeting solutions. Finally, we need application and UI engineers.

Silicon Valley is really a little micro-economy unto itself and the increasingly tumultuous macro-economic conditions haven’t affected our little corner of the world – YET. While there is certainly more candidates out there now, it has less to do with the macro-economy then the number of engineers and others from Silicon Valley stalwarts like Yahoo, eBay and even Google who are looking for opportunities to show what they can accomplish in a nimble, focused environment. We are also seeing more candidates from the earlier generation of vertical search companies that generally just reprocessed already structured data and therefore found it challenging to differentiate and get market traction.

BOOT - the Site was constructed around organic search marketing. Any need with this new money to expand into spending money on market (paid search or otherwise)?

Yen - Nope. We are growing 30% month on month and have no plans to deviate from our successful playbook.

BOOT How are monetisation plans going?

Yen - We have been pleasantly surprised by the number of consumers clicking on paid leads. We certainly haven’t emphasised that on our site, but the consumers tell us we offer them all the information they need to decide whether that hotel or attraction is a good fit, so checking rates and availability is the natural next step.

BOOT Series A was just a couple of months ago. Why the need to raise again so soon?

Yen- We didn’t necessarily to raise now, but there is an old adage that the right time to raise is when you don’t need the money! And our decision was made easier given the shaky macro economic environment, our confidence that we have proven our approach works and we are ready to scale, that we have known the Trinity Ventures team for a long time and wanted to work with them, and that they made a very fair pre-emptive offer.

Financial Collapse. George Bush in charge. We're all doomed!

Lots of people are asking me about financial crisis. Two types of questions I get asked. The first is "how did this happen" and the second "is the travel industry doomed as a result"

On the question of "how" I have just read an article that gives the best explanation I have come across. In today's online version of the New York Times, Vikas Bajaj writes a great piece called "Plan’s Basic Mystery: What’s All This Stuff Worth?". In it he goes deep into the strange asset/securitisation products that were put together by Bear Stearns, Lehman etc and caused this whole mess. Worth a read (login required).

Despite the madness of these products and chaos that has resulted from their collapsed I am convinced that the Travel industry will not only survive this crisis but will come out the other end thriving. You might call me an optimist but my view is based on history.

The travel industry in America bounced back from 9/11 in a quarter. In fact the whole online merchant hotel business (and retail for that matter) was created out of the ashes of that tragedy. Hotels gave cheap rates to Expedia, Travelocity and Orbitz etc. Expedia completed its acquisition of Travelscape and soon after bought HRN/Hotels.com.

In Asia, the whole business ground to a halt during the SARs crisis. Hong Kong and the region around it could not pay travellers to come visit. Now Macau is the centre of the gaming and Asian hospitality market. Bali has suffered through two horrific attacks and proposals for bizarre religious laws. Yet manages to survive and fight back each time.

In Europe London and Madrid also suffered horrific attacks in recent years. Yet still the customers flock to Spain and UK the for holidays and breaks.

Travel has survived tragedy and shocks before and will do so because at the core humans love to travel. But the secret to survival is reinvention, not hiding and hoping to ride it out. Growing through 9/11 came from reinventing online hotel distribution. SARs from reinventing the Asian hospitality industry. To get out of this Wall Street induced melting Bull will require the industry to once again find efficiencies in distribution, marketing and supply management. Mobile anyone?

Note - an observant reader (ok my mother) has pointed out that my melting "bull" reference doesn't work given the obvious udder on our molten friend above.

thanks to my number one anonymous commentator for the photo

Uptake takes in another $10 million in a Series B with Trinity Ventures and Shasta

Uptake (nee Kango) has announced a series B fund raising round of $10 million lead by Trinity Ventures (early investor in Starbucks) and including Shasta. UpTake blog post here. TechCrunch story here.

You will recall that Uptake is doing review meta-search. Indexing all of the user and editorial content on hotels and destinations.

This makes total raised to date $13.95mm after the series A announced back in July of $3.95mm (led that time by Shasta) but I now hear was closed in December 2007. I have an email exchange going with the Uptake PR people so hopefully will have some additional comments from CEO Yen Lee very soon. Am particularly interested in marketing plans, people plans and the need for a second round so soon after the first.

GoPlanIt - the Travel representative in the TechCrunch50

The second annual TechCrunch50 conference is over. This is the start up demonstration conference organised by web-celeb and CEO of Mahalo Jason Calacanis and uber blogger Mike Arington of TechCrunch. The conference profiles 50 web/tech start-ups, which compete for a $50,000 prize.

This year's travel nominee/competitor (there only ever seems to be one) was GoPlanIt.

GoPlanIt is a trip planning site. Enabling consumers to add activities, trip itineraries, maps and commentary to a trip plan. Naturally it comes with reviews and social networking/sharing/mobile access elements. It's difference from a "standard" web 2.0 planning site is that you can hit the PlanIt button and have a trip itinerary automatically recommended and built based on the behaviour of other users. This of course can then be modified and edited. The only downside is the that it takes time to build up the necesary history nad connections. Hence the service is currently only available in America. Here is the TechCrunch review/profile.

Being the travel nominee for 2007 was a great kickstart last year for TripIt. Since being part of TechCrunch50 they have raised another round (including an investment from Sabre). Just recently announce that the CEO of Mozilla Corporation (John Lilly) joined the TripIt board. Just this week king of the blogs Robert Scoble asked his readers/twitterers which online travel services they used. TripIt was mentioned again and again in the replies. You can re-read my interview with TripIt CEO Gregg Brockway here.

You can see a video stream of the GoPlanIt presentation here by CEO and founder Steve Chen and the presentation of the eventually winner - Yammer (TechCrunch Profile)

Tips for how to demo a startup for investors

Product demonstrations is the biggest test a start-up goes through in raising cash. If you are with a start up planning a series of presentations for capital raising, then TechCrunch is carrying the text from a recent Calacanis email on the tips for giving a start up demonstration. I receive a lot of requests by email on tips and tricks for raising angle/VC funding. I like Calacanis' list so recommend you take a look if you are looking to raise capital. There is a peculiar back story on Valleywag going on around this list of tips where a competitor of Calacanis in the conference world is claiming that Calacanis plagiarised the text for these tips but is also refusing to provide evidence. Strange back story but good tips.

thanks to airnos on flickr for the auto slicer product demo photo. Love that coleslaw

Start Up competition at WIT Web In Travel 2008

The preparation for Siew Hoon Yeoh's Web In Travel conference 2008 is in full swing (October 21 & 22 in Singapore). She has put an interesting little twist on the preparations for the event this year. In addition to the usual road of speaker and panel session, Siew Hoon is organising a "Start-up Pitch" competition. Along the lines of a mini, travel industry focused Demo or Techcrunch50, she is inviting online travel start ups to submit their ideas to the competition. Top 3 will then have a chance to present at the conference. Winner gets a "a Professional Development Program (PDP) voucher from the Cornell-Nanyang Institute of Hospitality Management (CNI) worth US$2,500 (valid for 2009) as well as the opportunity to take their winning idea to the next level with the investor judges." If you are an online travel start-up and interested then more, then here are the details.

General information on the Web In Travel conference is here. I am speaking at it - see you there.

Start up tips from founders of businesses that did not make it

Jeremy Liew of Valley VC group Lightspeed Ventures has a good post on this blog this week called "Post mortems on two failed startups from their founders". Touches on two stories from two different startups that failed. First a list of 7 mistakes from Monitor110 (raised $20mm) and the second a top ten list from a company that did not raise money.

If you are in the start-up business, then this is worth a read.

Thanks to bootload on flickr for the image

Uptake nee Kango raises series A of $3.95 led by Shasta Ventures

Quick news thanks to alarm:clock that review meta-search site UpTake (previously Kango) has closed a series A fund raising round of $3.95mm lead by Shasta Ventures. The number of destinations covered by UpTake is expanding fast and presumably the cash will accelerate this. More on them here and an interview with CEO Yen Lee here.