An indignant e-mail about my last column on Orbitz criticized me for suggesting that “announcing your intentions almost a year before you’re prepared to take your first booking” is a mistake every online travel company ought to avoid.
“You are assuming there was no strategic reason to do this,” quipped the reader. The note was signed, “Alex ‘the monopolist’ Zoghlin.”
All of which brings us to last week’s news: the revelation that six major carriers have been toiling away in secret for the last year to form a Web site that will sell distressed airline inventory. Is it possible that Hotwire, which was known in the airline business as Project Purple Demon, learned something from Orbitz’ premature announcement?
We know that Hotwire will be ready to do business this fall – it could even beat Orbitz to market, which would be a supreme irony. We know that American Airlines, America West, Continental Airlines, Northwest Airlines, United and US Airways are involved. We know that it’s funded to the tune of $75 million.
But what strategic pointers can we take from Hotwire?
– What they don’t know can’t hurt you. After the online travel community watched the erstwhile T2 take a beating from travel agents, the government and travel columnists, Hotwire almost certainly got publicity-shy. Now, with everyone’s attention focused on dissecting Orbitz, the startup is free to work unencumbered by bad publicity and perhaps even antitrust scrutiny.
– The name matters. Hotwire’s name is brilliant in more than one way. First, there’s only one way to spell it, as opposed to at least two ways to spell Orbitz’s name. Second, there’s already a “Hotwired” with an established online brand. If Hotwire can avoid trademark trouble, it stands to benefit from all those users who leave the “d” off when they’re looking for online news. That’s a risky, but shrewd, plan.
– Disarm all potential rivals. When Hotwire was ready to announce its existence to the world, its first order of business was to neutralize the opposition — perceived or otherwise. In the ensuing war of sound bites with Priceline.com and Expedia.com, it was able to easily differentiate what it planned to do, rendering these would-be competitors harmless. Never mind that Hotwire could easily launch a “name your own price” service for airline tickets in the future.
– Be happy. Hotwire’s placeholder Web site is a fine example of corporate-speak taken to an extreme. Describing itself as “the ultimate win-win Internet destination for value-oriented consumers and brand sensitive suppliers,” the average consumer would be hard-pressed to know what the company does. For now, calling itself the “uncommon dot-com” is false advertising. This kind of jargon is all too common online. We can only hope the finished product will be clichÃ©-free, but in the meantime, how do you criticize something you can’t really understand?
– About those pop culture references. Last but not least, Hotwire didn’t name its project after a bad movie. Let’s return to Zoghlin’s comments on my previous column. He took issue with my claim that the Orbitz project was named for a bad movie. “Uh, a comprehensive search of the Internet movie database, the largest database of movie information in the world returned no results [on Orbitz],” he writes. “Orbitz was a bad drink.” Indeed, it was. But I referred to T2 – Terminator 2, starring Arnold Schwartzenegger. Instead, Project Purple Demon will always be associated with that lovable PBS dinosaur, Barney. You can’t go any lower than that.
On a sidenote, even the most casual observer has to wonder if the airlines are engaging in a “divide-and-conquer” strategy with these projects. Using Orbitz as a decoy is distracting the industry from other changes in the distribution equation that are arguably more significant and far-reaching. If it works, it could be a model for other businesses within the online travel niche to emulate.