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Pre-launch coverage of, from 2004

Posted by Scott Kirsner  July 20, 2012 08:34 AM

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The stock of, the travel site, starts trading today on the Nasdaq exchange. The company will have a market cap of about $1 billion.

Since it's always fun to look back at the early days of successful startups, I went into the Globe's archives...This may be the earliest coverage of the company, from my "@large" column in the Globe on August 23rd, 2004.

Despite travel slump, online firms flourish

Remember that economic downturn? 9/11? The war in Iraq? Spiking oil prices, and airlines introducing fuel surcharges?

While that witches’ brew of nasty factors sent much of the travel industry into a prolonged funk, the online travel companies based in the Boston area hardly noticed. They not only survived – they thrived.

“When the travel industry overall was doing very badly, online travel kept growing,” says Terry Jones, the founder of Travelocity, one of the most popular travel sites. “Travel is now bigger than the next five categories of e-commerce, combined.” This year, consumers in the U.S. will spend $53 billion booking travel online, according to Cambridge-based Forrester Research. That number is expected to soar to $110 billion by 2009.

The rush of local activity in the online travel business feels like Logan on Thanksgiving week.

Jones, who lives in Dallas, is chairman of a new start-up launching next month called, which has offices in Maynard and Norwalk, Connecticut. Initial funding came from the Cambridge venture capital firm General Catalyst, where Jones is a partner. Kayak wants to become the Google of online travel, providing the Web’s most comprehensive search for consumers who want to make sure they’re getting the best possible deal. Kayak will compete against a handful of other start-ups – and possibly Google itself – in an arena that has been dubbed “multi-site search.” The idea is to check for the lowest airfares across dozens of different sites, for example, with just a single query.


Right now, everyone’s anticipating’s imminent take-off, waiting to see what the new site will do better than its rivals. Some competitors scoff at the idea of trying to launch a new travel site in 2004: “It took us four-and-a-half years to get where we are,” says Steinert at TripAdvisor. That didn’t stop Steinert from scoring a sneak peek at Kayak’s test site, which has been operating this summer for a private audience. He won’t reveal how he got a password.

The main thing that makes Kayak worth watching is the team behind it. Jones from Travelocity is chairman, Steve Hafner, a former executive at Orbitz, is CEO, and Greg Slyngstad, one of the founders of Expedia, is on the board. “This is a start-up that comes with people who understand how quickly this industry mutates,” says Jones. They picked the name Kayak to evoke the watercraft’s lightness and maneuverability, Jones explains.

Kayak will need that maneuverability, since its rivals in trying to improve travel search include not just TripAdvisor and BookingBuddy, but also SideStep, Qixo, Mobissimo, Yahoo (which bought a company called FareChase last month), and potentially Google and Microsoft.

All the companies trying to offer true multi-site search will face the challenge of comprehensiveness; some airlines, like Southwest, don’t seem eager to play in the sandbox. Others may not want to pay each of the sites for customers that get referred their way - a key source of revenue.

“It’s going to be incredibly difficult for all of these guys to survive,” says Forrester travel analyst Henry Harteveldt.


And a few comments from Terry Jones that didn't make it into the story: "It'd be very arrogant for us to say we’re going to take on the world and win. That would sound too much like 2001. We just think we have a good team, and are building a good product. We think there's space in the market for us to be successful, and we’re going to work real hard to make sure that’s true."

Jones: "This is a startup, but it’s a startup that comes with people who understand how quickly this industry mutates. I've always liked the remark that the Internet is Darwinism on steroids...and it still is."

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Innovation and technology news that matters, on a new website from the Boston Globe, featuring Scott Kirsner and other original reporting.

About Scott Kirsner

Scott Kirsner was part of the team that launched in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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