<B> Portal Wars Affect Travel</B>
By Dan Geller
<i>Dan Geller is the founder and president of WizBizWeb LLC, an e-commerce strategic development company based in the San Francisco area. </i>
Even though you do not hear the sound of guns, there is a war going on right now in the cyber marketplace that will have a dramatic effect on many aspects of your travel operation. The outcome of this battle will determine which handful of companies will dominate the portal world, and what type of services will be available for you and your travelers.
First, let's define "portal." A portal is a Web site that contains multiple-subject information, e-commerce components and links to relevant sites. The idea is to attract as many eyeballs as possible, and to charge advertisers accordingly. It is like a commercial TV channel, but one that allows the viewser (no, it's not a typo) to obtain information and act on it at the same time.
The current situation in e-commerce is similar to the one that occurs in the beginning of every new industry cycle, when there are many small startups that enter the market. Later in the cycle, a wave of mergers and acquisitions takes place, leading to the formation of a mature industry with a handful of mega leaders.
Similarities can be found in the cable TV, cellular phone and other industries that started out very segmented, but now are dominated by numbers one, two and three. A good way to test this concept is to ask yourself to name the fifth largest cellular phone company. You probably can recall only the top three.
So who will be the three portal channels that will dominate the e-commerce landscape, and how will they affect your travel operation? Let's look at the contenders.
AOL/Netscape/Sun: This trio is currently leading the pack with their combined resources, expertise and client base. AOL's core competency is in servicing its large customer base. Prior to the merger, AOL had a client base of 14 million users, and together with Netscape's Netcenter users, the trio will now have a client base of 23 million--about half the Internet users in the United States.
Netscape, on the other hand, is an expert in innovative and emerging technologies. It brings in what AOL does not have--technical superiority and respect from the techno community. In addition, Netscape brings a powerful and popular browser, and its tools and application for e-commerce.
Sun's role in the trio is to provide the hardware that will be sold to clients who participate in the portal and e-commerce offerings that the new company will develop. In addition, Sun will incorporate Java into the portal applications so that they can interact with different appliances such as PDAs, TV-top boxes, etc.
Microsoft/and ???: Microsoft is fortifying its MSN portal in order to become a bigger player in the portal marketplace. However, MSN does not have the customer base that AOL has, and it is foreseeable that it will buy or form a portal partnership with other popular entities such as Yahoo, Excite and other small players.
IBM/and ???: The blue giant is spending an enormous amount of resources on developing and establishing e-commerce (they call it e-business) applications for businesses. Yet, it does not have a portal with a client base that can draw viewers to the merchants who utilize its e-commerce applications. Just as with Microsoft, expect to see IBM buy some of the smaller players, and leverage its client base for its portal.
So how is all this going to affect travel management? The answer is very simple. In one way or the other, and sooner than later, your travelers will conduct almost everything that has to do with travel through a Web site. The reason is very simple: cost!
At some point, every travel manager will have two options in providing these services to their travelers. They can either build their own travel site (or have someone build it for them) on the company's intranet, or they can use a customized travel site. There are, of course, advantages and disadvantages to each strategy, and it is highly recommended that a travel manager do some research into e-commerce before investing in either option. Let's take a closer look at the two options.
<B>Proprietary Sites</B>
The main advantages are: <ul><li>Full control over content, links and format<li>Restricted and controlled advertising<li>High security, no outsiders can access<li>Proprietary formats and content</ul>
The main disadvantages are:<ul><li>High cost of development and maintenance<li>Limited or no interaction with the Web<li>Limited scope<li>No revenue potential from advertisers</ul>
<B>Customized Travel Portals</B>
The main advantages are: <ul><li>Cost-effective to build and maintain<li>Fast turnaround times for design and implementation<li>"Shell" content is constantly updated<li>Opportunities for advertising revenue</ul>
The main disadvantages are:<ul><li>Limited options for customization<li>Advertising might conflict with policy<li>Multiple links might sway the viewser<li>Minimal control over "shell" content</ul>
A decision on which way to go is not easy to make, and what might work for one company might not work for another.