We thank Alina Chircu, Eric Clemons, Doug Keskey, Laura Liu, Peter Moen, and Bob Soukup for input on related research that helps to inform the current work. Alok Gupta’s research is supported by NSF Grant #IIS-03011239 but does not necessarily reflect the views of the NSF. Rob Kauffman’s research on the online travel agency marketplace has been partially supported by the MIS Research Center at the Carlson School of Management and Carlson Wagonlit Travel. Nelson Granados is a doctoral fellowship recipient who is conducting thesis research on market transparency strategy and e-commerce in the online travel industry.
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Endnotes
1 Barry Diller’s InterActive Corporation (IAC) acquired Hotwire on Sep- tember 22, 2003, in a deal that was valued at $685 million. Mannes (2003) reports that, “IAC’s deal for Hotwire casts a spotlight on a section of the discount travel market in which consumers buy their plane tickets or pay for their hotel rooms before they learn which airline they’ll be flying or exactly which hotel they’ll be staying at. Priceline.com calls the system its ‘Name Your Own Price’ travel service, while IAC calls the market
‘opaque’ travel.” According to comScore/Media Metrix, as reported here, “Hotwire had 7.5 million different U.S. visitors to its site in August
… while Priceline.com, which also operates other travel sites and offers personal financial services through a licensee, had 5.6 million visitors to its flagship site.” Mannes further cites Legg Mason’s estimates that suggest that 2003 profits for Priceline, the market leader, will come out at about
$150 million, while Hotwire’s 2003 profits will be about $110 million.