AOL/Travelocity expand deal

AOL and Travelocity have embarked on a new two-year agreement, ending speculation that AOL might dump the Sabre subsidiary for a new partner or entirely new strategic direction.

Instead, AOL claims the partnership, renewed on April 1, has been expanded and includes an optional third year. The new deal sees the relationship evolving from an exclusive distribution partnership to a “strategic technology relationship,” said Jeffrey DeKorte, vice-president and general manager of AOL Travel.

DeKorte said Travelocity will remain AOL’s “exclusive, integrated online travel agency” as the air, car, hotel, package and cruise provider for AOL properties. However, the new pact also will have Travelocity using its travel and technology expertise to make AOL Travel more comprehensive, integrating editorial content and user-generated reviews and blogs, personalisation features, MapQuest maps, Really Simple Syndication alerts and video.

AOL Media Networks executive vice-president and general manager David Lebow said: “We want to make a bigger bet on the travel category, and to do that we need the really innovative products that Travelocity has added into its mix.

“At the end of the day, we are in the business of satisfying consumers on the web and we are in the media business,” Lebow said. “We want to offer consumers an online travel agency and choice, the ability to search the web in addition to an OTA, and [we considered] how to offer content on top of that, which is the model for all of our vertical channels.”

Travelocity has powered AOL Travel since 1999, but the relationship came under pressure in 2004 when AOL took a minority stake for $2 million in meta-search engine

Travelocity declines to participate in most of the meta search engines, including Kayak and FareChase, which Yahoo! purchased in 2004.

The new AOL-Travelocity pact gives AOL the ability to integrate its Kayak-powered Pinpoint Travel meta-search engine beyond AOL search functionality and into AOL Travel itself.

Travelocity’s initial agreement with AOL in 1999 required the company to pay AOL up to $200 million and share advertising and commission revenue.

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