<B> TechTalk</B>
By Cheryl Rosen
<B>GetThere Gets To Wall Street</B>
Taking advantage of a bull market for technology issues, GetThere.com went public late last month, offering 5 million shares of stock at an opening price of $16--higher than the $12 to $14 anticipated in October, and rising quickly to about $24 in its first days of trading. The stock, which brought in $80 million in capital, will be traded on the Nasdaq under the symbol GTHR. Among GetThere's major investors are United Airlines, which holds 33.9 percent in common shares and warrants, U.S. Venture Partners, with10.6 percent, and Brentwood Associates, with 9.67 percent. GetThere bought back 500,000 shares from Air Canada.
All parties involved in the initial public offering are in an SEC-mandated "quiet period," but Goldman Sachs & Co. vice president Mark Friedman said "the market for online travel companies is white-hot right now. There's a lot of euphoria and investors have a healthy appetite for technology stocks--and travel technology stocks are part of that. What also made it successful was the company's targeting of the business-to-business sector, an area where the Internet will have great penetration in the next few years." Goldman Sachs served as the lead manager for the IPO of Microsoft's Expedia, which went public in October (<I>BTN</I>, Oct. 4), opening at $14 a share and now trading at $48. "Given the strength of the market," Friedman said, "I'd expect more IPOs in the sector."
Forrester Research senior analyst Dan Garretson also was bullish on GetThere. "I like a number of things about GetThere's position: their relationship with American Express, which gives them access to a big customer base; their approach of being independent of any distribution system, which makes it easy for corporate customers no matter which agency or GDS they use; and the fact that in terms of development, they are focused on traveler functionality, where the real value-add is, rather than on developing an alternative to the GDSs, the way Oracle E-Travel is," he said.
<A NAME="2"><B>GDS Price Increase Spreads</B>
Galileo's announcement that it will ring in the New Year with an average 5.3 percent price increase was followed quickly last week by Amadeus, which raised its fees 4.5 percent, and Worldspan, going up 5.9 percent. Of the major GDSs, Sabre alone "is not prepared to make an announcement at this time," said spokesperson Taylor Cole. The hikes will add $18 million or so to the 2000 budgets of major carriers like United and American.
In other GDS news, Amadeus and its Swedish distributor SMART are partnering with Ericsson to develop a Competence Centre in Stockholm, Sweden, dedicated to the development of wireless travel services for handheld computers, PDAs and mobile phones. The three already have run pilot tests allowing SAS customers to book and cancel flights, and allowing the airline to automatically pull all PNRs with mobile phone numbers in them and update travelers about the status of their flights two hours before scheduled departure times. Amadeus spokesman Miguel Vermehren said the three partners plan "to set up a joint venture company at the beginning of the year and have products to show in the first quarter."
<A NAME="3"><B>Hotel Haggling, Part Deux</B>
ETravnet.com of Englewood Cliffs, N.J., is bringing an interesting new twist to online hotel auctions: a live link to a human being at the front desk to give callers an immediate yes or no on bid prices. The "Haggle With Us" system allows travelers to choose a particular property, and three chances to come up with a bid the hotel will accept. The site, which will debut in January, has signed up 4,000 hotels so far.
<A NAME="4"><B>Wal-Mart To Take Online Travel To The Heartland</B>
Wal-Mart is signing up travel industry suppliers for the January rollout of an online store that will sell 600,000 items, travel among them. The Middle America retail giant already has signed Sight & Sound Software Inc. of Portland, the American Airlines site's booking engine, and Amadeus as its GDS. Wal-Mart declined comment on its plans, but Amadeus said it has been hired "to facilitate the booking of airline, car and hotel reservations by a global audience." Sight & Sound president Jeff Kennedy said he has no clue how much traffic Wal-Mart will generate, but has "scaled the system to be able to handle huge volume." With what Kennedy called Wal-Mart's "huge but unproven market of 90 million customers a week"--many of them not-yet-wired blue collar shoppers and "not exactly the customer the dot-com companies are used to dealing with," it is "bringing the Internet to the masses.