SideStep - "He Gone"

OK – we’ll interrupt our holiday festivities and comment on the Kayak / SideStep “Merger”. There are a lot of tidbits coming through so we thought we’d throw in a few cents from the FMV point of view:

First of all – Reports say that Kayak will only hire 20 of the company’s 75 employees, not including its chief executive, Rob Solomon.

Wow, nice timing on that one Kayak – right before the holidays. Merry Christmas SideStep – now you guys can include a resume in your holiday cards you’re sending out!! Try this on your next search site: From: Santa, To: Kayak, and you'll get a big lump of coal in all of your results.

Second , Kayak raked in $196 million in VC money to be able to pull this “Merger”.

FMV puts the word “Merger” in quotes (insert air finger motion here) simply because we always thought that the larger company buying out a smaller company was called a “Takeover” or "Buyout" – but it’s obvious we’re not finance guys…

Third, the financing round was led by prior investor Sequoia Capital – and also included General Catalyst Partners, Accel Partners, Norwest Venture Partners, Trident Capital, Oak Investment Partners and Lehman Brothers Venture Partners, Silicon Valley Bank and Gold Hill Capital.

We guess $196 million is a lot of money so you need a lot of players.. FMV thought about joining in as well, but Kayak called saying they were drawing a hard line at $196 million and therefore they didn’t need our extra $250 to pull off the round…

Fourth, Kayak says there is less than 10% overlap among Kayak and SideStep users. (subscription needed)

This one actually caught us a little off-guard. We're told time and time again “There is NO loyalty in the airline search market, people always check multiple sites”. But now we’re told that tens of millions of searchers have a very strong loyalty to their preferred meta-searcher and don’t cross check? Or maybe because people don't know more than one? Whatever the case - seems like a weird fact.

Finally - Kayak co-founder and CTO Paul English added: “As a native Bostonian, I am also personally gratified to finally see an East Coast technology firm purchasing a West Coast counterpart.”

OH YEAH BABY – IT’S ON !! West Coast Sucks !! It's like the rapper wars again - Biggie and Puff can take down Snoop Dog and 2PAC ANY DAY ! Don't bring your weak stuff in our house Silicon Valley !

Man, where did this quote come from?

Overall – interesting stuff. We always thought that a few of these guys would get taken out, we just didn’t look at them “Merging” with each other. If the 10% overlap part is true - nice play for Kayak on simply shortcutting the process and ramping up their scale.

It’ll also be interesting to see what happens now with FareCast and Mobissimo - will others just look at these companies and think that they can get in the market now on the cheap(er)? Although we think Mobissmo has a long long way to go.

Happy Holidays from FMV & MAXJet

Hope this holiday season finds all you good readers very well. Unlike passengers of MAXJet, the all-business class airline/gimmick that ceased operations today. At least some stranded passengers will get a complimentary hotel stay from MAXJet.

We wish the very best to you and yours this holiday season, and are looking forward to lots more fun in 2008.

Free In-flight Wireless*

*Sometimes, Maybe, & Limited. Your mileage may vary. All Rights Reserved.




This is a bit outside our core discussion area, but we feel compelled to comment on JetBlue's new inflight Wi-Fi service, which apparently debuted a little while ago It seems pretty cool to offer this service, and we can understand people getting excited about it, so we're not surprised JetBlue's getting a bunch of media buzz. However, when we read the details we were left underwhelmed:

• Works on limited devices only



• Works only with Yahoo! mail



• Hardware/bandwidth won't allow for attachments to mail or full web access



• Probably only available on transcons



• No available roll-out plan

The most telling quote from JetBlue, "It's not marketable. It'll have to be more of a surprise and delight for our customers if they get it." Well, with that kind of attitude, they certainly can't charge for it. And they won't. Though they imply that someday if they can get it right they may. Which is why we're keeping an eye on this.

But in the meantime, we're just annoyed that this is portrayed as something really special when it seems to be little more than a parlor trick.

Take Off, Eh

Wednesday's WSJ reported (subscription required) that Aeroplan is hatching a maniacal plan for global domination. Well, that's a paraphrase. In fact Aeroplan acquired LMG, an operator of retail loyalty programs in Spain, the Netherlands, New Zealand, Canada, and the Mideast, as well as the UK's (apparently) popular Nectar program. Perhaps more interesting to us, was the Aeroplan CEO's comments that the firm remains interested in the US market. Aeroplan believes that an acquisition is the way to go in the States.

Now maybe you've heard, approximately EVERY US carrier has some sort of militant shareholder insisting that said carrier should divest its loyalty program. That includes not only American, but also United and US Airways (Star Alliance cousins to Air Canada) and Northwest (effectively based in Canada). We can imagine that any of those programs would be a tasty morsel for Aeroplan.

In the past we'd ignore this invasion from the north, but not after Rush and Bryan Adams. All signs point to credibility:

- Aeroplan is pursuing some corporate structure changes to facilitate deal-making (i.e. they want to raise money);

- Aeroplan's revenue is up over 20% so far this year over last (i.e. people will give money to them);

- The Canadian dollar is up more than 60% over the last 5 years to parity with the US dollar (i.e. the money will go a long way).

The next several months should have some fun news on this issue. Building a global loyalty brand with some leading carriers seems like a good way to mine a lot of customer data and mint some cash. Let's be honest, a lot of consumers are just fiends for acquiring loyalty points, cheap trinkets, and other shiny objects (Exhibit A: Flyertalk.com). Now imagine if you could use points for anytime rewards to Las Vegas *OR* Toronto. Nice.

In related news, earn two frequent flyer miles for every purchase you make using Google Checkout this month. Woo hoo!

More Spirit

Here is a legitimate news story about Spirit's MILF promotion, consumers' response, and Spirit's counter-response. We use the applause meter to break it down. According to ABC:

"[Spirit's spokesperson] said that Spirit's senior vice president of pricing is
a British citizen who was unfamiliar with the MILF terminology and that the
airline is not trying to offend customers."

FMV APPLAUSE METER: [Dead Silence]

But Spirit continues:

"The most obscene thing we've noticed, is what other carriers have charged to fly the Caribbean before Spirit's $9 fares."

FMV APPLAUSE METER: [Raucous Clapping, Party Music, and General Spirit of Hilarity]

So they start to insult your intelligence by suggesting that it was an innocent mistake by a naive Brit. Then they slug you with their carefully crafted witty quote. Well played. And at the end of the day, they hit their target audience. Probably at a price point cheaper than a bi-plane pulling a banner at Daytona.

Apparently Fares Fluctuate 400%

Seems that Yapta is actively trying to promote their pre-buy shopping tools over post-buy change alerts:

"The average airline ticket price fluctuates 400%. All those tricky price changes mean people like to shop around before they purchase airfare. That’s why the latest version of Yapta includes a comparison shopping notepad, right in a sidebar window of your Internet browser. "

Seems like a good call, given trends toward less generous carrier reprice policies. And the Yapta tool in your browser seems kind of neat. However, we question whether a downloaded app model will ever prevail over pure web services such as Kayak. Are consumers comfortable with another monitor on their PC in this era of pop-up blockers and virus threats? We know that even SideStep eventually had to go to the web-site play even though they were really sucessful with the download app.

More importantly, what's up with that 400% stat? What is the source? What does it mean? That average fares start at say $150 and end as high as $750? Fares don't even really change much, do they-availability changes? So many questions for such a petty point. But if consumers take the bait - more power to Yapta.

Spirit Airlines - MILF Sale

For those that are lucky enough to not be spammed by Spirit Airlines promotions, you're missing out on unbelievable teasers like the title of this post, the actual subject line of an e-mail we received over the weekend.

For those that aren't familiar with the common use of this acronym, type it in Google and spot check the results, or use the Urban Dictionary. You probably don't want to try that exercise at work, it's not for the morally squeamish. Of course, per Spirit, MILF stands for Many Islands Low Fares. Seriously (see graphic).

Can you imagine any legit company ever running that kind of promo? We really don't know whether to be thrilled by the corporate whimsey or dismayed by the seemingly unnecessary PR risk. Anyway, it was edgy enough that we decided to pass it along to you Fare readers to contemplate.