Yahoo Travel Chases Kayak With FareChase

yahoo-travel.pngLast night, Yahoo signaled that it is serious about competing in the travel price-comparison search market in the wake of Kayak’s recent $200 million acquisition of Sidestep. Yahoo Travel put its FareChase property, formerly a tab, front and center on the travel homepage. FareChase is now the default search engine for pricing flights, hotels, cars, and vacations. [Update: Yahoo says it is not the default for everyone. Some people will see it, some people won’t].

yahoo-travel-farechase.pngYen Lee, the CEO of travel search startup Kango and a former general manager of Yahoo Travel, noticed the change and offered this analysis on Kango’s blog:

It seems like just yesterday that the travel sector crowned Kayak the undisputed heavyweight champion of price comparison search following their acquisition of SideStep. But wait! It looks like Yahoo has (finally!) unveiled FareChase, the price search engine they acquired back in 2004. On the Yahoo Travel homepage, the Travelocity booking engine is no longer the default search option, it has been re-labeled ‘classic search’ and FareChase is the default search.

. . . Presumably this brings a new competitive element that Kayak might not have expected (let’s be serious, four years after the acquisition, did ANYONE expect Yahoo to finally launch FareChase?).

Sounds like the move surprised him. That Travelocity deal must have been pretty lucrative, even if it was from another era. Could Yahoo be sacrificing short-term profits for the bigger game of maintaining and capturing market share?

Lee also notes that Yahoo searches more travel sites than Kayak, which could help it ferret out better prices. Of course, as a tangential competitor to Kayak (although Kango is more about travel planning than pricing), it is in his interest to point out new threats to its business.

Regardless, it may now be Yahoo that is facing the threat. According to comScore, the combined traffic to the Kayak and Sidestep networks in December in the U.S. was 6.3 million individuals, which is within striking distance of Yahoo Travel’s 7.3 million. Price shopping is perhaps the main draw to any travel site, so Yahoo has to step up its game to maintain its lead position.