Hardly shocking to read that IAC-controlled Expedia is possibly looking to buy-back $3.5 billion in stock or up to 42% of the company at an offer of $30/share. The Financial Times also reports that there are rumours the company may spin out it’s TripAdvisor unit and eliminate up to 400 positions. In an odd turn, given that they don’t normally comment about such things, the company has denied these rumours.

 

Given that Expedia’s domestic growth has essentially stopped (1% revenue increase in Q1) and it’s international growth is underwhelming (25% growth looks fine, but it’s a far cry from the triple-digit stuff of not-too-long ago and on a small base, to boot) you can easily see why it’s valuation might be under scrutiny.

 

Layer in the fact that the only real share price growth Expedia has seen since it was spun out the second time, about two years ago, appears to have been the last stock buy-back, and that IAC’s principle investor and Diller’s friend John Malone’s Liberty Media might well be wondering where their money is, and you can easily see why another buy-back might be in the cards.

 

Finally, the pressure on the model itself is intense. Strong competition from Travelocity,Orbitz and other third party players, the growing power of suppliers who want to control their distribution, the rise of meta-search tools like Kayak and SideStep, plus overall category maturation and you don’t have to squint too hard to see why getting the price up and getting out of Dodge might work out just fine.

 

UPDATE: Expedia has issued a release confirming this buy-back. However, this quote from Diller is beyond my ability to wrap my head around:

"With this action, we couldn't be clearer that the management and the Board of this company are confident in the value of Expedia and in its long term future," said Barry Diller, Expedia, Inc.'s Chairman and Senior Executive."

I guess maybe I'm just slow...

 

Congratulations to my former Expedia Europe colleagues on the launch of TVTrip.com, a bilingual (so far) video rich travel comparison site. The team, including Marc Ruff - former head of Expedia France, Anja Keckeisen - former head of Expedia Germany, and Fabien Bourdier - Marc's Number Two at Expedia France, are some my favourite, and among the most talented, members of the original Expedia team (I actually interviewed Marc and Fabien Back In The Day), so I am very pleased to see them getting back in the saddle.

More comment about the service itself once I have had a chance to spend more time with it. It looks pretty solid from a content perspective for a beta, though. They have been busy.

 

I don't know why I'm noticing more travel related stuff these days, but I am. This one caught my eye, from The Canadian Travel Press, a travel industry publication, with a primarily retail travel agent readership. The piece asks several travel agents across Canada the following question (and for the record, I am a huge fan of traditional travel agents, and think that the good ones are worth their weight in gold). Here is the question and one very telling answer:

Q: Do you believe that Internet booking companies like Expedia are cutting into your business significantly?

A: "I know we [travel agents] lose sales. It's a problem, but what can we do?"

- Suzanne Goyer, Suzanne Goyer Travel, Montreal

Well. I'm just not going to say anything further. That quote alone speaks volumes in many, many ways.

 

I share a few thoughts about WestJet's challenge to expand distribution in the US, and add new routes. The story is here.

The Star Alliance comment is true, but the real issues are deeper than what the reporter was able to fit into the story.

Firstly, the real strength of Star Alliance for Air Canada on transborder is the United codeshare, which ensures that US originating passengers flying to Canada see Air Canada flights, since they carry usually carry a United flight number. Same with US Airways (which includes the former America West now, too). This is huge, because it guarantees visibility (albeit under another name) for these services in a market where Air Canada is not well known, ties in to other connecting flights providing additional source passengers, and gives points on the other airline's loyalty program.

Secondly, WestJet's challenge isn't just in securing interline and codeshare partners (to provide valuable inbound connecting passengers, and allow it to feed same on the outbound) but in talking to and working with them. As a low cost carrier model, WestJet has had a mostly closed system in which they operate the airline and distribute their seats. I hear that they have tried to make a change to use technology provided by Travelport, which I have been told has been a real mess (if true, I'm far from surprised. Travelport has been a major disapointment almost since it's inception). Working with other carriers and other distributors means more technology investment and increased pain of "participation" in various platforms used to sell airline tickets, all of which complicates the WestJet model. Plus, they end up having to pay all the various parties for this distribution, much like full service carriers do, reducing their overall yield per ticket sold. This is as opposed to carriers like Ryanair who simply don't use any distribution and keep costs low and control in-house.

A smaller issue is that WestJet doesn't offer a First or Business Class service, which makes it harder for it to offer interline, or connecting, services to Asian or European carriers who do.

The real question, for me, is why WestJet seems hell-bent on going the full-service-type distribution route. They need to expand, sure, but this way of distributing their product adds cost and reduces control, especially in a world of increasing online distribution where the suppliers should hold the cards.

I certainly wouldn't be going that way. But that's just me :)

 

Startupnorth.ca has the full story here: http://www.startupnorth.ca/2007/06/07/the-tvg-is-dead-long-live-ventures/

While it's unfortunate to see a group who was essentially supposed to be about fostering start-up financing and creating opportunities for them cease operations, you have to wonder about their stated reasoning. If they were suffering from a market that no longer wanted to support them, when they were supposed to be supporting that very market, what does that say about relevance?

(Posted via 'berry)

Great piece here.

My view: they underestimate the "commerce" part by a long shot. TripAdvisor jumped the shark eons ago; it's a store pure and simple at this point, lipstick or not.

But still a good story and they are still the most successful example of monetizing community this side of eBay.

(posted on the train via wifi)

 

It's going great. Lots of posts on the mesh blog http://www.meshconference.com/blog

(Via berry)

Congrats to the following who have been selected as the mesh 15 minutes of fame, class of 2007. Great stuff:

    -  Conceptshare: a Web-based, real-time collaboration tool for designers

    -  FiveLimes: a community for those concerned about the environment

    -  Sneakerplay: a social network for fans of sneakers and street culture

    -  Octopz: a service that powers document collaboration

    -  Demofuse: a tool for websites to automate guided tours of their
       services

    -  WildApricot: a hosted website solution designed for non-profit
       agencies

Each of these folks will get 5 minutes in the main room at mesh. I can't wait to hear from each of them.

Also, mesh is sold-out and we have cleared the waitlist as best we can, so if you had asked to be on the waitlist and have not heard from us, unfortunately we weren't able to accomodate you.

 

Looking forward to seeing you all next week.

(Via 'berry)

We are down to the wire with mesh tickets, so if you have put off getting yours I would suggest you not do so much longer.

We will keep working on floorplans to ensure that we can fit in as many people as possible, and will keep tickets on sale for as long as we can, but the fire limit is the fire limit so we can only do so much.

As they say, book early to avoid disappointment (except, um, really in this case).

http://www.meshconference.com

(Posted via 'berry)

I'm once again Chair of the CIRA Nominating Committee, and again am looking for a few good people to put themselves forward as possible Board Members. CIRA is the body responsible for running the .ca domain, on behalf of the People of Canada.

Would you be interested? Check out http://www.cira.ca or ping me at stuart at stuartmacdonald dot ca.

In case it wasn't already obvious, I've decided to reduce my blogging for a while.

I've been travelling, have had little time in front of a computer screen (I'm posting this via blackberry from a playground with my daughter) and have a lot on my plate currently. So that, together with a bit of a lack of passion for a specific topic, frankly, has led me here.

To me, a blog is much more than just writing rambling somethings to no one. It is participating in a discussion which the technology enables -- and the truth is I just really can't get to that conversation right now.

My one-time alma-mater, First Choice Holidays PLC - the parent of Signature Vacations - is merging with the massive German based TUI to form an even more massive travel cencern. This seems like a win for all. First Choice needed a tie up, their management team is solid, and consolidation in the leisure travel world isn't likely to slow down anytime soon.

Now, if they can only get that internet thing to go away, everybody can be happy :)

 

This could be huge, in terms of service and pricing.

 

I'm hanging at the ICE new media conference through Thursday. I'm on a panel about the future of the 'net and moderating one on monetizing social media.

If you are here, say hi.

http://www.ice07.com

The event is kicking off with a Gala this evening. Maybe 200 people here - feels lightly attended, to me.

Back by popular demand, we are hosting another mesh mixer. After the last, heaps-o-fun event in the Fall, we thought it high time to do it again.

Super casual, no big agenda, just a chance to connect as we roll towards this year's mesh in May. We buy the munchies, you buy the drinks and everybody's happy ;)

It's at the Charlotte Room (http://www.charlotteroom.com) is at 19 Charlotte Street, near Spadina and King in Toronto.

Hope to see you there.

Last week, my friends at eBay once again brought Jeff Cole, Director of the Center for the Digital Future at USC (http://www.digitalcenter.org) to Toronto, to present the latest in their continuing study of our online habits and their impact. The stuff is fascinating - especially to a data junkie like me - so I would encouage you to read the highlights at the link above if you are interested in where it is all headed. His findings around young people and community are truly intriguing.

Also, Edelman presented the latest in their annual Trust Barometer survey results. NGOs score highest as organizations, but "people like me" are still King. Is it any wonder that Social Media is all the rage? Thanks to the 'net, it has never been easier to find those "people like me" and see what they're thinking. Marketers: ignore this at your peril.

Finally, I was one on a panel for the Canadian Public Relations Society, discussing Social Media - and blogging, specifically. A podcast of the whole thing is up on the InsidePr site (http://www.insidepr.ca) so you can catch it there. It was pretty fun to do - with 2 of my mesh Partners also on the panel, together with a lovely food blogger named Jasmine.

My key message: don't forget to put the "public" in these relations, you PR types. Blogs are written by passionate folks who are doing it for free. Don't expect that your standard media pitch will be necessarily well received.

Thanks to David "Blog Boy" Jones of Fleishman-Hillard for moderating.

That's it for now. I am trying to post more frequently - sorry for the lack of links and any typos - I'm doing this on my 'berry while on the go, after I lost the better version of this post a little while ago. And yes - I did type this with my thumbs, on the subway :)

So, I finally took an hour to write and link to a bunch of neat stuff that's going on - and then when I went to save it, the system cacked and I lost it. Like a 1985 computer glitch thing. Blue Screen of Death. I couldn't believe it.

Well, suffice to say that there is a lot going on. I will get to it later, I guess.

Grrr...

 

Fabulous - and very on-the-nose - post about DaimlerChrysler's slippery slide into brand oblivion.

 

Like last year, thanks to our Sponsors, we are offering a limited number of post-secondary Student mesh tickets at the uber-low price of $25 plus GST.

And like last year, they are going *fast* so heads up that if you want in, be prepared to show a Student I.D. at the event and buy yours soon.

Click "Register" at http://www.meshconference.com.

And don't say I didn't warn you.

(posted from chilly a power-free house via BlackBerry)

At long last, mesh 07 is Go for take-off. And what an event it is looking to be. When Mike, Mathew, Rob, Mark and I decided to do this for the first time last year, our sincerest wish was to create a venue that would cast some light on "What's next online?" Well, It looks like we are getting that done.

Our keynotes are stellar: Richard Edelman, Jim Buckmaster, Michael Arrington, Tom Williams and Austin Hill each bring their own viewpoints and experience to "What's next online."

Our Presenting Sponsors are stellar: Windows Live, Edelman, Yahoo! and JLA Venture Partners have humbled us with their support, and we are very thankful.

Our Supporting Sponsors are also an illustrious group: eBay, ITAC, Expedia.ca, Canada News Wire, gwp brandengineering, Cisco, Chapters-Indigo.ca, MaRS and MCC Planners have all said that this is an event that matters. Thank you.

We are still working on the rest of our content and schedule, but we are really excited about how it's shaping up. Mark, Mathew, Rob and Mike have more, as does Mathew on the mesh blog.

All that's missing is you.

Register now.

After a break (there's a pun there for those "in the know") I am back online. I will be posting more regularly again, I promise.

Just after the Holidays I heard from Mel Crothers, the so-called whistleblower on the WestJet spying scandal. You may recall that Mel told Globe and Mail reporters Brent Jang and Patrick Brethour that he "didn't expect a thank you from Robert Milton." Well, Mel tells me that a nice, personal Thank You note is exactly what he got not too long ago.

Nicely done, Robert.

 

Standing with fellow revellers and my significant other ("Suprise! We're going to New York! Pack a bag, the kids are with Gram"), Anna awaiting the arrival of 2007 in New York City.

Hope you and yours have a wonderful 2007.

My friend Austin Hill has set out to do a neat thing for the holidays. In the tradition of the Million Dollar Homepage, Austin has put up a blog post and will pay $1 to charity for every comment made on it. As of 4:54pm Eastern on December 19th, he had 71 comments. Pretty neat, eh?

Also, if you are in the holiday giving spirit, be sure to check out GiveMeaning.com, the Vancouver-based giving site for the $5 philanthropist run by my friend Tom "Still The Kid" Williams. Support a cause that matters to you, and invite your friends to help, too.

And happy holidays to all.

 

Need a little pre-Christmas break? Check this out.

Via my former Seattle neighbour Mark Taylor (the former "markta" to you blue badgers out there).

 

When I fired off the previous post last night, I was essentially unimpressed with the launch of the new paid search (e.g. where advertisers pay for placement in the search returns). I mean Yahoo! bought Overture some time ago, and they were the very first paid search player of any magnitude. Basically, Y! has offered paid search in the US for a very long time (and in French in Canada) so while this new platform (codename: Panama) offers a much more Googly targeting and analytics platform, for the most part I was sorta "ho-hum, it's about bloody time."

But then, I started thinking more about what this means for search marketing in Canada, as a category. And in that context, this move, and the arrival of msn AdCenter, are tremendously significant.

When Orbitz launched in the US, we at Expedia were really nervous about it, as you can imagine. But what actually happened was that their arrival and subsequent spend in advertising and product development actually grew the category in total - so, a bigger pie, growing faster, and more customers for all.

I think that's what will happen here in search as well. To date, the only game in town, really, was Google. So that means that the entire category was being pushed by what that one player was doing to promote it. Now, we will have x-times more salespeople, attention and effort being put against it which should mean more money will move to this channel *in total* and that this may start to become a more core part of an overall media plan.

Now, the fact that Google still represents something north of 80% of Canadian search volume certainly gives Y! and msn a challenge. But their entry should be good overall.

Congrats to Y! on this launch and a great event.

(Posted by blackberry)

Yahoo! is going to start to offer paid search in English Canada.

It's 2006.

So there's your newsflash.

In the past two weeks (or so) I've done interviews with PROFIT Magazine, Canadian Business and VISA's Small Business Resource website. Topic? Broadly speaking, Web 2.0 or elements of it and what the heck it's all about. That's right. It's November 2006, and leading Canadian publications (or more specifically, their Editors) are just now starting to ask "Soooo, what's this Web 2.0 thing?" To which some might say "Where've you been the past 4 years?" But, if you believe this stat from Zoomerang reported by BusinessWeek that 79% of marketers have never even heard the term Web 2.0, you'd be getting closer to the truth.

All of the "is Web 2.0 over and done with?" chattering is simply completely right. If the Regular Folk are now tweaking to it, Web 2.0 as The Next Big Thing simply has to be close to having run it's course, and the bleeding edgers had better get on with figuring out the NEXT Next Big Thing. For the rest of us? Well, let's get ready for the party to...start.

What, you say? But Stuie, you just said it's over. Yup. As New Shiny Orb, it is close to done. But, as Real Thing it might be just starting. And zowie that could be big.

I mean, c'mon, remember when people used to talk about "e-commerce" as a special thing? I used to chuckle then - it's not like people ever called having a call centre "phone commerce" or a store "brick commerce" - it was just new and the leading edgers got there first. Eventually, most people understood that these were all just part of "commerce" and got over it. Bank machines, DVD players, mobile phones, digital cameras. Categories mature and eventually go mass. And maybe we are seeing the start of that happening here, too. If so, that means that the real innovation (and at scale, maybe, too) and real money are still ahead of us.

Web 2.0 won't be a New Shiny Orb indefinitely, just like nothing ever is. Elements of it will just become part of how stuff is done. Big companies and governments will start to use parts of it (like mashups, web services, blogs and wikis), folks who never joined the computer club will find themselves using elements of it without realizing (like adding a comment, reading a user generated review or sharing a photo), and yet another wave of technological change will have washed over us.

Future users will likely never know that there ever was something called Web 2.0, but their lives will be better for it anyway. And that's just fine, I think. It's not like it's anything new.

 

For any of you who may have been keeping track, it took us about 6 months to get our communal acts together and get the keynote podcasts from mesh06 up for public consumption (despite enormous effort by Rob, Mathew and Mike). So this time, just as bad? Not a chance, because we called in a hired gun by the name of Leesa Barnes, the podcasting Queen from Caprica Interactive Marketing who not only did a great job interviewing people at the event, but managed to get them to us barely a few days later. And now, you can listen to what some of the people at the Irish Embassy had to say over on the mesh blog.

Thanks to Mathew for actually doing the post.

 

Without them, we wouldn't have keen insights, deep understanding and clear-eyed, thoughtful commentary.

Oh, and hilarious quotes like this one in today's Globe and Mail story on Air Canada's whimpering IPO:

"Scotia Capital Inc. analyst James David added that the airline industry is known for being a risky investment."

Well. There's your value add right there.

Thanks for comin' out, Jimmy.

(Posted via blackberry)

The Economist has a quick, solid piece covering the increasing fortunes of the old-school US commercial airline business. In short, the US$35 *billion* they have lost over the past five years (yes, you read that right) seems to have finally, possibly, just maybe, driven them to gain a closer to competitive and cost-based footing with the upstart and low-cost carriers.It also mentions JetBlue's recent challenges, including a loss making Q3 and resulting equipment sales, which I had not been aware of.

Always fun in the airline business, isn't it? I can only imagine how challenging it must be for third-party guys like ExpediOrbiLocity and others to be earning any appreciable compensation from those carriers these days, given the carriers' improving fortunes, search and metasearch (more on that in a future post - lots of action in that world), fenced inventory and CRS changes moving more power and money into their camp.

It might still be the milk at the back of the store and responsible for driving a lot of cross-sellable traffic, but increasingly the third party guys have to be looking at the air category itself in terms of revenue from booking fees and very little else. Everybody knew it was coming - it now must be close to here.

 

Awesome night. The Embassy says there were more than 90 here and I'd believe it, easy.

A real pleasure. Thanks to all who came.

(Posted via blackberry)

In stark contrast to last week's IAB broadcast panel, I was at a session about online video put on by Akamai this morning, where the panel was super.

There were three people, one from CanWest, one from CHUM and one from the Sympatico side of the Sympatico-msn tie up (I will add their names when I'm online next) and they actually seemed to understand this stuff. Thoughtful, smart commentary, with real live experiences and a pretty dialled-in view on the subject matter.

Maybe this is the difference between having the people actually *doing* the stuff talking vs. their leadership? Hard to say, and it is hard for senior business leaders to go as deep on a specific topic as these people did.

But, it bodes well for future innovation and development once these types of people get more of a say.

The rest of the morning was good, too, with a Forrester guy sharing video numbers and trends. It would have been nice to have some (any) Canadian stats, but in any event the direction is clear.

Nice work and thanks Akamai for the invite.

PS: mesh meetup tonight at the Irish Embassy, 6pm. Hope to see you there.

(Posted via blackberry)

Oh my sweet goodness, this is the funniest - because it is so true - thing I have read about business in a long, long while.

Thank you Joel!