ONLINE TRAVEL
Think it's tough to get the average Web site off the ground? Try facing antitrust legislation and Senate hearings before registering a single page view. Those are the headaches of Alex Zoghlin, CTO of Orbitz, a new online travel firm scheduled to go live by the end of summer. Orbitz is backed by American, Continental, Delta, Northwest, and United - which together handle 80 percent of all commercial flights in the US. But its most impressive partner may be ITA Software, spawned by MIT's Artificial Intelligence Lab, which helped develop Orbitz' high-flying software.
Orbitz' detractors, led by competitor Travelocity, argue that the site's big backers will collude to offer exclusive airfare deals, cutting out independent sites. Zoghlin counters that current travel sites are themselves biased, with preset stopover locations that favor some carriers and deny consumers the best fares. Both sides have filed briefs for a Justice Department antitrust inquiry; the Senate's Commerce Committee is also examining the issue. (This isn't the only case of competing airlines joining forces to sell discount seats online. Hotwire, backed by six major carriers, plans to compete against priceline.com in selling unbooked seats beginning this fall.)
If Orbitz prevails, its online reservation process alone may blow away the competition. Unlike mainframe-based systems like Sabre, Orbitz uses racks of PCs to search fare data, making it easier to scale up computing power. And its intelligent ITA algorithms evaluate all the possible fares simultaneously instead of employing heuristic shortcuts designed to use as little computing power as possible. The result, says Zoghlin, is a wider selection and cheaper fares. "Competition should be based on how good your technology is," he says, "not how much you lobby."
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