Social media is either overhyped, underhyped, or somewhere in the middle

Across two conferences two sets of travel executives have highlighted the challenges in figuring out how much to invest in social media for online travel companies. At last year's PhoCusWright Steve Hafner of Kayak called social media "overhyped". A session or two later former Expedia CEO Rich Barton called it "underhyped". At this year's No Vacancy Glenn Fogel of Priceline called social media experts "charlatans" while Toga Hospitality CEO Rachel Argaman said the future of the internet was pages inside Facebook. Meanwhile Wotif provided the perfect case study to test this debate by launching $11 rooms for 11 minutes via social media.

In my latest Tnooz post I discuss this debate and look in depth at the Wotif promotion. Check out the story here.

PhoCusWright 2010 summary video including the BOOT asking Groupon's Rob Solomon a question

Three min video above from the PhoCusWright team with some commentary and summary points from last November's PhoCusWright conference. At the 33 second mark you will see me asking Groupon's Rob Solomon about build or buy for Groupon in Asia.

PhoCusWright: HomeAway boss Brian Sharples talks acquisitions and how far we are from instant conf in online vacation rental

The travel industry has conquered the sale of hotels online. The big four (Expedia, Orbitz, Travelocity and Priceline) as well as local players (Wotif, Rakuten, Ctrip, HRS) have been aggressively and successfully selling hotels online for nearly a decade.

I have often looked to the very under developed market for the booking of vacation rentals and wondered when it will be ready for the same level of online sales as hotels. When will the structural and supply roadblocks impeding online vacation rentals be removed to allow for the massive amounts of online research for vacation rental and pent up demand for vacation rentals translate into bookings. Actual online transactions rather than the listing and referral models that dominate.

With that background HomeAway CEO Brian Sharples took to the centre stage at PhoCusWright yesterday with his vision for the company and the vacation rental business. As a reminder HomeAway is the biggest of the vacation rental aggregators. They have raised more than $450mm in venture funding including a massive $250mm round in November 2008 - specifically targeted for acquisition spending.

Brian shared with us that they have been very active in spending that money having completed fourteen acquisitions 5 years. He made one of the most acquisition positive statements I have ever heard from an online travel CEO. "If you can't compete with it, buy it" was his rallying cry for growth through consolidation.

The potential for Vacation Rental online is substantial given the difference in the online percentage of sales for vacation rental compared to hotels. According to the recent PhoCusWright report on the industry called "Vacation Rental Marketplace: Poised for Challenge" in 2008 the total vacation rental market was about $25bb in the US and $100bb globally. But only 12% of the vacation rental market is online. PhoCusWright predict that the online market in the US will hit just $4.6bb in 2010 compared to online hotels being a $100bb plus market.

But as the report and Sharples both say, the biggest impediment to the industry is the challenge of securing inventory from property owners. To enable consumers to be able to secure instant confirmation bookings rather just kicking of an email conversation with the property owner. To enable the aggregators like HomeAway to generate merchant level margins by shifting from being a listing business to a merchant.

Sharples indicated that he is determined to get to the merchant model. Two of the fourteen companies bought by HomeAway are property management technology companies. Sharples will use these to supply property owners with the means (and rewards for) providing real time inventory. He is backing that up by "first time in three years increasing our tech budget as a percent of revenue" That is not surprising. The biggest player in the online vacation rental market should be working day and night on finding a solution.

What is surprising is how far away the industry is from the solution. Sharples believes that "it will take 5-7 years for vacation rental to be properly online" (instant confirmation). Dara Khosrowshahi (Expedia CEO) was similarly pessimistic about how long it would take. During his executive interview the next day Khosrowshahi said that instant confirmation vacation rental transactions were 3-5 years away.

It has been five years since the launch of HomeAway (crunchbase profile), seven-eight years since Cendant first started to put together a consolidation play of European vacation rental sites and 11 years after Expedia bought Vacationspot and Rent-a-holiday. Yet according to two of the best placed execs in the market we are still half a decade (or more) away from instant confirmation bookings at scale. Clearest evidence imaginable of how hard it is and will be to crack instant confirmation on the most distributed and fragment accommodation sector.

BTW - for more on this sector but in a different region see my recent interview series with Australian vacation rental boss Justin Butterworth. Part 1 here, part 2 here.

Innovation Summit: the BOOT picks two out of four

A new BOOT post on Tnooz is live discussing the finalists and runners up in the PhoCusWright Innovation Summit.

Last night I tweeted my top four picks. Two of them made the final four. My picks were all transportation search companies. I chose air search companies Everbread and Vayant, meta-search innovator Hipmunk and online rail company SilverRail. The two runners up I chose were Facebook trip planner Gogobot and social media monitoring company Revinate (competitor to finalist TrustYou). Democracy at PhoCusWright had a different view and the attendees have chosen 2010 innovation finalists up SilverRail, Hipmunk, Goby Technologies and Kony Solutions as the finalists for the 2010 Travel Innovation Summit. Runners up were TrustYou, Cruiselabs and Groundlink.

Full post on Tnooz with my thoughts here.

For more background check out my posts from yesterday on Revinate and TrustYou, Everbread and SilverRail.

Innovation Summit: Everbread - air search change that sounds good but need to see more before I can be sure it is revoultionary

Everbread is in the middle of a perfect storm of PR and buzz. A storm combining the high profile of their CEO (Morten Lund - who famously invested in Skype), the constant chatter over the need for alternatives to ITA in the wake of the Google/ITA merger and efforts by their staff to demo the product anywhere anytime (including in a suit, by a pool in 35C/99% humidity in Singapore).

Assen Vassilev Co-Founder and VP Strategy and Business Development of Everbread spoke today at the PhoCusWright Innovation Summit about his Haystack product. Haystack is an air availability and pricing search engine. A search engine but not a booking engine. They are seeking to by a B2B engine provider who separates searching from booking and fulfillment.

Their claim to a difference between existing OTA search and engines like ITA is that they are able to display fare and routing combinations not seen before. Combinations of on-GDS and off-GDS fares and routes (ie LCC) from different airports supporting the destination or departure city. Combinations that go beyond interline and carrier alliance ties. In the demos I saw at WebInTravel in Singapore I was shown fare and routing combinations that were less convenient but cheaper than traditional search results. Different to anything I have seen from an OTA or meta-search company. During the presentation Vassilev claimed that Haystack often presented results that were both more convenient and cheaper due to the ability bring in different departure airport options.

I had high expectations of this presentation coming into the Summit. The shots shown to me in Singapore were unlike anything I had seen from any other search engine. Unfortunately after the Innovation Summit presentation I was left with some of the same questions I had in Singapore and a desire to see more. The presentation needed to show more of examples rather than build up the story behind the business and the need for search revolution. The audience would have been more impressed by a series of examples of successful savings and routings rather needing to be introduced to the concept. I recommend that Everbread start a campaign of getting examples out there.

Rod Cuthbert on the Critics Circle agreed calling the presentation "entertaining" but felt it "left him in the dark about the business". Gene Quinn (also on the panel) said that "so many people are looking for alternatives to the Google/ITA combination" and thought that Everbread had "potentially a very powerful solution" but that he "did not see enough of the engine."

The people I have met from Everbread are smart and engaging and the story is a good one but I need to see more proof before we can confirm the tag of revolutionary.

For more on Everbread check out these stories - Tnooz and TechCrunch

Innovation Summit: SilverRail - is now (finally) the time for online rail?

Rail is well overdue for online travel innovation. We are into the third decade of online travel yet it is still almost impossible to book online train tickets through the traditional online travel channels of OTAs and meta-search. [ side not - At least in the west it is. In India online rail is a booming sector]

At the PhoCusWright Innovation Summit Aaron Gowell Founder and CEO of SilverRail used the of billions and billions of dollars in annual rail ticket sales to convince the audience of the potential for online rail.

He claimed that rail was a $300bb a year global market and the fastest growing sector in travel. Maps filled the power point slides showing high speed lines being built across Europe and China. Billions and billions in infrastructure spend. There are clear examples of long distance rail beating the airline business. The channel tunnel has stolen 80% of the market share in the Paris to London route. Hundred's of billions in investment and sales of rail tickets yet still 60% of the tickets are booked at the station.

Gowell told us that the only agency channel making progress in selling rail was corporate agencies. But most of those agencies have to transfer the call to separate call centres. As a result of this and complexity Gowell claims that corporate agencies are only able to do 4 bookings per hour vs 20 per hour for flights.

SilverRail also convinced us that they are well placed as a company to take advantage. They have some big name backers who contributed to a $9.5million series A round including Sutter Hill Ventures, Accel Partners, GrandBanks Capital and Brook Ventures. Gowell told me after the presentation that he has about 8 months of money left but is not worried as the potential is so great that he is confident that a new round of raising was not a problem. On revenue SilverRail are taking a transaction clip from the supplier - much like a GDS or switch.

Within 2 minutes of his presentation I was convinced of the potential for online rail. Unfortunately Gowell used nine of his twelve minutes to convince us of the market potential. This was more time than needed and cut short the time available for him to show us the SilverRail Product. What we saw of the product was impressive but I was left feeling like I needed to see more to be certain they would not end up like Wandrian.

On the critics circle (American Idol style panel at the Summit) Jim Hornthal of Triporati put a number of very important challenges/questions to SilverRail which I then had a chance to ask Gallow during an interview after his presentation.

Jim said: I am not sure what we need rail sold through OTA people are comfortable booking through the supplier direct (like the Low Cost Carrier model).

Aaron responded: model has changed dramatically in the last two years. Suppliers now need and are asking for distribution. For example you can now get a train from Germany to the UK. This is not a product that can only be sold on the Deutchebahn website. 2 years ago it was a hard sell to suppliers but now they are looking for us.

Jim said: There is not commission in rail so not attractive to OTAs

Aaron responded: packaging. With so much of the air spend shifting to rail (ie London to Paris route) the OTAs need to add more transport options to facilitate their packaging sales. Make their money out of the hotel.

I am a believer on the timing and potential for online rail. SilverRail put on a great show and have a very impressive list of staff and backers but (as like many at the Summit) I was left wanting to see more of the product and less of the power point.

update - here is what Bootsnall had to say about SilverRail

Innovation Summit: Movitas - I get the problem but not sure they solve it

At the PhoCusWright Innovation Summit Chuck Sacco VP Client Strategy of Movitas very cleanly and clearly described the problem his company was trying to solve - how to move the conversation and interaction between hotel and customer from the room to the whole property. Customers are constantly on the move on property with connected devices yet the main interaction between the property and the customer continues to be phone calls from the room or visits to the front desk.

While the problem was easy to describe, from the twelve minute presentation it was challenging to see how Movitas solved it. As a Bootsnall tweet said " kinda struggling to put what they do into one sentence.."

Sacco described the system as "developing for hotels a guest operating system"– a means for on property communications that connects a hotel and guest when the customer is outside of their room. For example a consumer can check in virtually using the tool and then go on to search local information, on property information, book tours, make reservations and pay their bill.

From the 12 minute presentation at the Summit it was hard to see how good a job Movitas is doing at meeting challenge as the presentation was delivered very quickly - too quickly. Lots of screen shots streamed a lightening speed. I would have preferred to have seen one or two examples of the product displayed slowly rather than the half a dozen or more screen shots and moving images flashing left, right, up and down. I am also not convinced that a hotel can persuade busy mobile road warrior customers to come to the hotel's own mobile platform when apps from Google, TripAdvisor, Orbitz, Kayak and more provide the vast majority of the functionality that Movitas was describing without the need for a new download or functionality learning curve.

The hotel guest is on the move and is connected - no doubt about it. They are hungry for information and content - absolutely. But they already have lots of apps and tools downloaded. I am not convinced that Movitas will be able to persuade hoteliers to persuade customers to add one more.

Update - here is what Bootsnall had to say about Movitas

Innovation Summit: TrustYou v Revinate - aiming to cut through Too Much Information for hoteliers

A running theme here at the BOOT has been the challenge the online travel industry faces from "too much information". A sub-section of this challenge is hoteliers trying to understand, track and respond to reviews and user generate content.

At the PhoCusWright Travel Innovation Summit we had back to back presentations from companies trying to help hoteliers with this problem.

Benjamin Jost - co-founder and managing Director of TrustYou presented a semantic search and sorting engine. A means for categorising and sorting through unstructured user generated reviews. This can be used to improve customer search and to allow hoteliers to understand and search the nearly limitless amount of data. His presentation focused on the "magic box" that made structured the mass blobs of text that make up the typical review. Results were technical but impressive how accurately the technology characterised and summarised positive and negative comments.

Kyle Duffy, VP of Global Accounts for Revinate showed a tool for allowing chains and properties to monitor all forms of social media for commentary on the property, area and competitors. Allows hotels to generate a social media score card and compare that to their direct competitor set.

Both are trying to solve a similar problem - helping hotels to sort through the mass or unstructured information that are on review and social media sites.

Both companies are young but doing well. Revinate is claiming it is already profitable. TrustYou say that have been in business for just 1 year but already have 1,000 customers and $1mm in revenue.

TrustYou focused their presentation on the "magic" behind the technology. Showing us the results from their machine. Revinate focused on the tools they provided to their hotelier customers to sort, manage and respond.

Revinate's presentation lacked the crisp clarity of the TrustYou and it was harder in the Revinate presentation to see how powerful the tech was in the background. That said, in focusing their pitch on the end tool for hoteliers Revinate provided a stronger business platform and model than TrustYou.

TrustYou had the better "geek factor" but Revinate looked more business ready. As a tweet from Hudson Crossing said maybe Revinate and TrustYou should get together.

PhoCusWright starts tomorrow - tweeting #phocuswright

PhoCusWright starts tomorrow. I will be tweeting via @hughestim and #phocuswright

Packing for PhoCusWright, organising meetings and reading up on Innovators

Two weeks to go until the PhoCusWright Conference in Arizona. This year's theme is "Chaos Calls - Navigating the New". Promo video here. The BOOT will be there from Sunday night, tweeting, blogging, networking and working away. Follow me via @hughestim or track #phocuswright.

First up at the conference is the Travel Innovation Summit. The full list of companies presenting is here. A couple have already caught my eye including:

• SilverRail - rail is long overdue for online innovation and Cameron Jones has recently joined them as their VP Commercial;
• Everbread - I have seen a demo of this product already and the buzz behind them is super strong;
• Vayant - though they have stood me up for interviews a few times they are also trying to change the way air searches are conducted;
• Hipmunk - best name in online travel ever (maybe 2nd best to Appolicious). Can the product live up to the hype? Will consumers adapt to new ways to search?; and
  
• Gekko.com - trying to turn review writers into affiliate businesses.
  

One of my favourite parts of PhoCusWright is the "PhoCusWright Surprise" which occurs when I meet an online travel start up(s) at PhoCusWright that I have never heard of but is (are) number one in their category by some reasonable measure. See stories on last year's surprises Localyte and geckogo.

If you are going to be there and are interested in setting up a meeting or an interview please email me.

If you are interested in attending you can register here but hurry. Ram Bandrinathan of PhoCusWright tells me that already the primary and secondary hotels are sold out and there are only a very limited number of conference tickets left.

Reading the BOOT - syndication options

In addition to being able to consume all the BOOT you need here at tims-boot.blogspot.com or thebusinessofonlinetravel.com, you may be interested to know the industry news aggregation sites that carry a BOOT syndication feed . Here are three sites that carry copies of BOOT content that might be of interest:

• Tips from The T-List: The original online travel blog aggregator;
  
• PhoCusWright Connect: Travel industry bloggers and PhoCusWright analysts together; and
  
• Travel Insight 100: A partnership between the T-List and review meta-search company Uptake.

Enjoy.

Thanks to Brit for the photo on Flickr

Geckogo: start up surprise #2 from PhoCusWright 2009

The " "PhoCusWright surprise" occurs when I meet an online travel start up(s) at PhoCusWright that I have never heard of but is (are) number one in their category by some reasonable measure. Yesterday's surprise was Localyte.

Surprise number 2 - Geckogo

Geckogo - is a travel planning and inspiration site that want to solve the "too much information" problem by allowing travellers to aggregate content from social networks, friends recommendations and use that information to build trip plans. They claim to sit in between the travel aggregation sites like UpTake / NileGuide / TravelMuse and travel social network sites like WhereIveBeen and TravBuddy. Though I am not sure I yet see the gap. That said, I see the value of content company with social media interaction. The challenge for a business targeting that space is how to collect information and establish an index.

Geckogo founders Pokin Yeung and Eric Mackinnon are coming at the challenge through building a Facebook application called travel brain. It allows consumers to load cities and destinations visited (like TripAdvisor's Cities I've visited). The difference with TA's app is that Geckogo gives users a chance to increase their "score" by adding information about a destination. This rewards consumers for generating more content and engaging further with Geckogo. The result was that the Facebook app is the main content acquisition tool and consumer point of interaction for Geckgo. In addition partnership with Bradt Travel guides has helped populated editorial content on the site.

With Facebook as a driver, Geckogo claims to have attracted a network of 700,000 users - with 8% of those contributing content regularly. Results in 250,000 articles mainly collected from Facebook users - parsed and classified through their information architecture. Eric described part of the architecture as a "synonym database" that prompts contributors to help flesh-out areas that need more information. For example a casino in a destination means gambling but gambling as an activity in a destination will prompt a question on whether or not their is a casino.

This is where the surprise factor came in. I have talked before about what content companies need to do to succeed. My definition of success has always been SEO raking and traffic. Yet in Geckogo we have a online travel content company where early success has come from the using Facebook as a distribution and content acquisition mechanism. They made me feel a little old and outdated in continuing to believe that search is the number one battleground for traffic.

Being Facebook dependent is beneficial for Geckogo as their competitive set is lower. But in my interview with Pokin and Eric at PhoCusWright they admitted that Facebook dependence comes with risks. Just like a change in the Google search algorithm can send SEO dependent companies from the top of the world to the bottom of page 5, so too a Facebook change has dramatic impacts on Geckogo. When Facebook moved from a profile based page structure to the more twitter like newsfeed structure, Pokin admitted that usage dropped dramatically. Geckogo had to rebuild the way the app interacted to support the new approach.

Still in the angel funding stage Geckogo knows they have more money to raise and work to do. Eric admitted they are looking or about four times as much content before they will be able to answer the level of questions they are targeting. In addition to more content they should also work on the query architecture to help drive more responses and customer interaction. But the surprise factor success is there - Geckogo claim to be the number one content contributor on Facebook (but not the biggest app). Update - see below

For a bit more information on Geckogo check out their presentation from the Facebook app targeted fbFund. Also a story on the same presentation from UpTake industry blog written by Elliot Ng.

Update. Geckogo founder Pokin comments below. Here is an extract

"I should also clarify our claim of being the number one travel content source on Facebook. As a blanket statement that was absolutely true when we posted it, but I can’t validate that now since our friends at Where I’ve Been have also started collecting content as well. I believe we continue to be the number #1 source on Facebook for travellers to gain meaningful travel insight and help one another in their travel plans."

Localyte: start up surprise #1 from PhoCusWright 2009

A PhoCusWright side effect that I look forward to is meeting online travel companies that I have never heard of but are number one in their category by some reasonable measure.

This year two companies had me turn to the blogger next to me and in shared geek awe (with a hint of punditry arrogance) say "how come we never heard of these guys before".

[update May 13 2010 - Localyte has been bought by Nile Guide. Tnooz story here]

Surprise number 1 - Localyte

Localyte is a online content company that allows travellers to ask direct questions of and search content produced by "local experts". Classic UGC and social networking stuff. The surprise factor with Localyte is the staggering the amount of content they claim to have amassed. At the PCW Innovation Summit Localyte head of Biz Dev Doug Renert claimed 40,000 individual contributors – self appointed local experts – providing content and direct response answers to questions on what to do in a location. This has generated an SEO content well with a depth of 700,000 reviews and a mind boggling 20 million words per month. This is extraordinary for a company founded just over two years ago (Aug 2007) and drowns out any question of whether or not they have met my 3 rules for a content start up.

In his blow by blow summary of each of the Travel Innovation Summit presenters Phil Caines of Tourism Tide has a great summary of Localyte's business and product.

"Grabs recommendations from a 40k strong army of local experts to provide travel advice. Can be used by travel agents to advertise their location. Growing to 700k reviews in 2 years. Travelers can pose questions to locals and they will respond accordingly. The program can be used using the Global Sherpa iPhone app. the locals get a system of points and rewards to motivate the contributors. They throttle questions so people don’t get inundated. Open API so that anyone can integrate this technology into their sites."

Impressive. Surprising.Now to the challenges.

There is an viable business model for this level of content though not a guaranteed one. Traffic and content is a great foundation for an online media business but monetisation will still take effort - if Facebook cannot be certain of its revenue streams then niche social media content sites need to work even harder for monetary success. In Localyte's favour there are potential B2B revenue streams through destination marketing organisations as well as the typical ad sales and transaction referral commissions.

The main question for Localyte is - what constitutes a local expert and how to verify. In a Tnooz post of mine that included them I said

"I have concerns about the accreditation of the local and how to be sure they are not a rep of a particular travel product and therefore biased"

Sean Keener of Bootsnall via a tweet put it even more bluntly

"What constitutes a local expert? - local tour provider often times equals spammer in my experience. "

For my local region (Bondi in Sydney) the number one expert on Localyte is a travel agent living in Sydney. As a Sydney based travel agent it is true that this Localyte member is going to know what to do and where to go. But there is also a commercial angle here. The challenge for Localyte will be how to balance the commercial interest of the expert with the brand pitch for providing unbiased local advice.

My Localyte Summary - a very impressive level of content and worthy of our surprise. But challenges in executing on monetisation and ensuring the independence of the experts.

If you would like to read more on them then the tweets around the Localyte PhoCuswright presentation that were hashtagged #pclocalyte can be seen here.

Here is the Localyte demo from PhoCusWright

Tomorrow will post surprise number 2 - Geckogo

Google’s Next Big Thing – Killing off the TV media business. More from interview with Rob Torres at PhoCusWright

Google hangs over every online industry conference. Their ability to deliver and take away traffic is unmatched. I have even argued that being Google friendly has overtaken being consumer friendly as the product development test for website design team

At this year's PhoCusWright conference TripAdvisor's Steve Kaufer said in jest "darn it everyone starts at Google, I want them to start at TripAdvisor". Google’s traffic dominance is here for so long as the search box is the number one starting point.

It was with this background Google's MD of Travel Rob Torres and YouTube's CMO Suzie Reider took the Center Stage of PhoCusWright to pitch the "Next Big Idea".

In a recent Tnooz post I included my notes from a post presentation 1:1 with Torres. In this post I will share my thoughts on the presentation itself.

The core of the next big thing from Google is actually close to the old big thing. Google was appealing to the audience and online marketeers to take advantage of the video assets of Google, the power of video as an advertising medium and (as Torres put it) to "stop thinking about [Google for] internet demand capture and start thinking about [Google as] a driver of brand awareness”. Put another way - use Google and use online video as brand building marketing channels rather than just looking for the direct marketing response metrics that has made search so powerful. While new for Google, the online marketer and media channel mix planner this is a clear move against old media- namely the TV advertising market. It is like a declaration of war by Google against TV stations with an air of "anything you can do I can do better".

Torres and Reider went on to describe a number of the new advertising and content products that were available in this shift. Not only is this a big challenge that Google is issuing to the TV industry (especially free to air), it is a big shift in the Google advertising mindset. In our interview later Torres stressed his belief that the dramatically lower CPM rates for online video advertising as against TV made TV ad spend an “ego buy” rather than a rational marketing decision. That said, he admitted that number of views is still the best measurement metric for online video advertising.

I think this is the right move for Google but will be full of challenges. They have the world’s most powerful online video asset and with PPC costs escalating they need to change the marketer’s mindset to one of brand over direct response. They have the reach and they have the video. But success will depend on providing a more advance measure for audience engagement than ratings or views. For marketers to make the switch from viewing search and online video as direct channel to a brand building channel they are going to need a prove brand growth. The tradditional media apporach of ratings and demographics will not be enough for the sales and data hungry online marketing executive. Google will need to develop a new and more detailed mechanism for proving the value of a view.

As a coda to this post - here is an extract of the stats quoted during the presentation:

• Visits to travel sites up 12%
• On average people 9 research session before bookings. Visiting 20.3 sites
• 56% of frequent travellers visit video sites
• 77% of internet users consume video (not sure how this works with above)
• 13% of [online?] travellers have uploaded a video
• 20 hours of video uploaded every minute to YT
• 450mm – size of YT monthly audience
• YT has 5000+ premium content partners (Nat Geo). They only serve adds on premium content providers
• 40mm impressions per day on YT
• 1 in 4 Internet users visit YT each month

Did not say where or how generated statistics.

1:1 interview with Rob Torres is here

Secret to Innovation - technology and social movement together. Thoughts from PhoCusWright Innovation Summit

Another follow up from yesterday’s Travel Innovation Summit at the PhoCusWright. During the presentation I saw a lot screens and tech diagrams from innovators showing the latest in Web 2/3.0 technology. Lots of impressive looking technology touching on search, collaboration, analytics, content aggregation, mobile and more. Despite the impressive nature of the technology on display I came away reminded that technology is not enough for innovation. With innovation there is also critical need for an execution element and timing the product with social readiness for its adoption. For a new piece of technology to be capable of becoming an innovation it has to be timed to match the social movement and consumer readiness to use it (or be capable of holding on long enough for consumers to catch up).

This was particularly front of mind for me because only recently we learnt about Yahoo! finally shutting down GeoCities (TechCrunch story here). A business it bought for $2.87billion. At the height of GeoCities (wikipedia here) popularity it was the number one place for user generated content and destination information. It was the blogging platform before there were blogging platforms. Countless personal GeoCities pages were set up by individuals to talk about their lives, animals, home towns, travel experiences and more. Millions of words of local content were available through GeoCities years before TravelMuse, Nileguide, Geckogo, Tripsay, TripAdvisor, Uptake, etc were a glint in an angel funder’s eye. Yet it died. Clearly not for lack of user generated content. Sean Keener of BootsnAll said at breakfast yesterday that GeoCities died because Yahoo! blew it because they did not know what to do with it. There is something in this. But another reason why GeoCities died was that it came out too far ahead of the desire for consumers to share themselves with the InterTube world. When GeoCities was at its peak in 2000/2001 the traffic was high, the usage was ok but there was no revenue model (no AdSense or equiv) and no sharing and distribution mechanisms (twitter, facebook, URL shortening). The consumer trend for writing, sharing and engaging in social commentary was not there to support the business. The product/technology was launched too far ahead of the social desire and trend to use it.

Don’t believe in this need for technology and social change to be together? Let me give you another example. In 1996 – as a young lawyer- I was excited to load PointCast as my screen saver. Without me having to click a button or search a site, news and information was pushed to me. All the information I used to have to surf around to find was coming to me in a means that was more convenient, faster and “hands free”. Everybody in the firm followed suit and downloaded the product. Then in Jan 1997 (wikipedia story here) Murdoch offered $450mm for company. While PointCast was holding out for more money network admins across the corporate world were finding their network s crashing down under the load of constant information queries. Employees were banned from using PointCast. Without complaint we shrugged and uninstalled PointCast. The critical part was “without complaint”. We liked the feature but did not need it. It was not that big a deal to go back to reading the local paper, BBC and CNN online. Within moments Murdoch pulled the bid and PointCast was later sold for (a paltry) $7mm and shut down a year later. Fast forward to 2009 and each of us has a newsreader indexing hundreds of information and news site. If companies tried to block newsreaders there would be an employee revolution and drop in productivity. PointCast was the first prototype of a news reader but socially we did not need to fight for it and did not miss it much when it left because there wasn’t enough content out there to compel the need for an aggregation product. Technology came too early for the consumers.

My point from these two examples is that when trying to innovate it is critical to focus as much on timing and social readiness as it is to focus on the technology and product. Making sure consumers are available and ready to pick up what you are building.

I talk about this in my EveryYou concept. Our ability to develop a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time is only now becoming available because of the matching of technological capability (near unlimited processing power) and consumer desire to share information and data and receive targeted advice and replies.

What do you think? How important is timing in innovation?

thanks to Vermin Inc for the photo

Final 4 PhoCusWright Travel Innovation Summit

PhoCusWright boss Phillip Wolf just announced the following as the final 4 for the Travel Innovation Summit. These four are off to the next round.

1. Amadeus IT group (Amadeus Affinity Shopper)
2. Gliider
3. Global Motion Media Inc (EveryTrail)
4. Translations.com

My predictions were
1. Dapper
2. Traveltainment (anothe Amadeus entry)
3. Tourabout
4. x+1

In other word 0 / 4 for the BOOT

My predictions and background are here

Twittering from PhoCusWright Orlando

I will be twittering all week at PhoCusWright in Orlando. Follow me @timothychughes or watch hashtags #phocuswright and #pcw09.

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

PhoCusWright: Organising appointments and meet ups for Orlando Nov 17-19

I am going to Orlando for PhoCusWright November 17-19. Due to the nature of long haul travel I will be there for the whole day the 16th and 20th as well. My diary is starting to fill up with appointments. If you are interested in making a time to meet up please email me or make contact through PhoCusWright's eConnect conference network site.

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.