SideStep Goes Hunting Up the Amazon

SideStep, one of the best-known travel metasearch engines, needed wider distribution and better exposure on the Web. Amazon.com wanted to offer more robust travel services than simply selling discount tickets.

Last November, both parties discovered that the answers to their respective problems may lie in each other. Due to swing into launch early this year, 15 billion Amazon customers will be able to book online travel from a broad range of carriers, hotels, and vacation packagers from the Amazon site by using SideStep.

That’s a big visibility boost for SideStep, which calls itself the number one travel and hospitality metasearch engine. It should also provide lots of extra reach for SideStep’s airline and hotel partners, who pay the engine on a cost-per-acquisition basis for leads generated.

Search engines like SideStep are travel aggregators; they give consumers a place to start comparison shopping for travel, and then send them to the carrier’s Web site to complete the transaction. That’s different from online travel agencies such as Expedia, Travelocity and Orbitz, which keep the user on their site and do the actual bookings themselves.

Travel metasearch engines have been part of the rise of vertical search in the last few years, but they still lead to a small percentage of travel bookings compared to the big online agencies. Forrester research has estimated that less than 2% of consumers use metasearch engines to book travel. But the thought persists that with the right mass exposure, travel metasearch will catch on by offering the public much easier ways to compare fares and set search parameters than the big online agencies do. For that reason, one of SideStep’s main search competitors, Kayak, has partnered with AOL; and Yahoo! bought another metasearch firm, FareChase, last year.

Amazon’s travel record has been surprisingly weak: an early relationship with Expedia that did not pan out, and then a deal that offered users access to HotWire, a discount reseller of excess travel inventory.

“Amazon are very smart guys, and I think Jeff Bezos has wanted to do something interesting in travel for a while,” Carpenter says. “But what do you do if you’re not going for just another affiliate relationship with a player like Expedia? You look forward to the next model for travel search—Generation 2.0 of online travel.

SideStep began its Web life in 2000 as downloadable software that let consumers search for their own fares; the company has been a free-standing Web site for about a year now and also offers a downloadable toolbar. But the Amazon deal will get SideStep in front of more users with an urge to move than any deals it’s struck so far.

And the past year has seen a good number of deals, mostly with carrier and hotel partners. Part of the difficulty in building the travel search vertical, Carpenter says, has been persuading the suppliers that they should be involved at the search phase of the buying process—that in fact, lots of consumers don’t automatically go to their Web site but detour through search engines for their research.

“In the last year, most of the remaining holdouts have finally awakened and realized there’s no reason not to partner with the metasearch engines,” he says. “Why wouldn’t they? We’re bringing consumers to their Web site, they own the customer relationship, and it costs them a lot less to sell a customer than it would through the online travel agencies.” In the six weeks preceding the Amazon deal, SideStep signed agreements with American Airlines, Hilton Hotels and Marriott Corp.; later in December, it landed Delta Airlines. Short-hop specialist Jet Blue has been a partner almost from the start.

“These travel providers have seen generic search take hold in a big way with Google and Yahoo!, and have done a ton of pay-per-click search marketing through them,” Carpenter says. “Now they’re coming to a universal understanding that this [vertical travel search] is what comes next for them.” (Well, almost universal. One holdout remains the elusive white whale of travel: Southwest Airlines will not show fares or sell tickets anywhere but on its own Web site.)

So far neither Amazon nor SideStep will give details about the financial deals of the partnership, not about any possible integration with A9, Amazon’s branded search engine. Some of the revenue SideStep earns from its Web site comes from advertising; no word on whether ads will run on the Amazon versions of SideStep.

All Carpenter will say for sure right now is that a co-branded offering will appear in Amazon’s travel shop early this year, and that SideStep is already prepared to handle the expected traffic load. “When we designed our engine, we built it to scale massively without much problem,” he says. “We have about 4.5 million people who use this thing every month, and it runs without breaking a sweat. So we’re really confident that even funneling millions more through our engine is not going to present an issue.”

And besides, it’s not just about the traffic: there’s that visibility, too. “The fact that all the people who move through the Amazon world are going to be exposed to us—that’s tremendously important,” says Carpenter.

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