This Travel Search Site Could Go Far
Stanford University has proved itself fertile ground for sprouting successful Internet entrepreneurs. From Jerry Yang and David Filo of Yahoo! (YHOO ) to Sergey Brin and Larry Page of Google (GOOG ), these Stanford whiz kids-turned-businessmen have indelibly shaped the Internet as we know it. Following such footprints may be daunting, but many are game to try.
One of the most compelling attempts of late may be coming from 33-year-old Svetlozar Nestorov, a computer-science grad who studied data-mining with the Google founders. Last year, he and a co-founder launched travel search engine Mobissimo. A so-called "meta search" site, Mobissimo takes a visitor's query and scours about 80 other travel sites and search engines, typically returning a wider array of prices, airlines, and options. The fledgling company already handles about 500,000 travel searches a month -- a blip compared to online travel bigwigs, but solid for a newly hatched search site.
The market for finding and booking travel on the Internet is already going full throttle. According to Forrester Research, travel is the largest sales category in online commerce, accounting for $52 billion of the $145 billion in U.S. online sales this year, with the total expected to hit $119 billion by 2010.
The vast majority of travel purchases are made with the help of searching, but such technology hasn't yet lived up to its potential in the travel sector, according to Nestorov. "A typical online customer goes to four different travel sites," says Nestorov. "That's a time-consuming process."
It's an opportunity that hasn't gone unnoticed by Internet heavyweights. Yahoo in July acquired travel search engine FareChase for an undisclosed sum. In September, hotel franchiser Cendant (CD ) shelled out more than $1 billion for online travel agency Orbitz (ORBZ ).
The steep competition doesn't deter Nestorov & Co. San Mateo (Calif.)-based Mobissimo is different, they say, because it scours more purveyors of airline tickets and, soon, lodging, to help assure customers they're seeing the best possible deals. In addition, Mobissimo has no interest in handling customer service or the transaction, which has helped convince many travel sites to let Mobissimo search their sites, according to Nestorov.
But can such a hands-off approach make money? Mobissimo currently takes a small percentage of each travel purchase it facilitates. It's also building an advertising business, in which it sells ads around its search results. For instance, a customer searching for flights from Boston to Las Vegas may be presented ads from hotels like the Mirage in Las Vegas.
"We expect advertising to be our biggest business," says Mobissimo co-founder and CEO Beatrice Tarka, who first met Nestorov in 1987, when the two were teens at a computer camp in Siberia.
Nestorov, tall and affable, is a native of Bulgaria. As a kid, he became engrossed in mathematics, competing in national and international math "olympiads" -- events, he says, that were followed as fervently in Bulgaria as sports are in the U.S. But math always struck him as too abstract. When he and his classmates got their hands on some Apple computers in 1985, it was a revelation.
They began tinkering with code, writing rudimentary computer games. "It was a way to apply ourselves and see the results," he says.
Nestorov was 21 when he enrolled at Stanford and immersed himself in the sciences of data-mining and information extraction. Although his peers included Brin and Page, who went on to launch Google, Nestorov credits retired Stanford professor Jeffrey Ullman with sparking his entrepreneurial interests. Ullman was also an adviser to Brin and Page, and long served on Google's informal technology advisory council. "If you had a great idea, he urged you to not just write papers about it," recalls Nestorov.
Nestorov blushes a little when discussing his Google connection. (He says he thought about joining his classmates there but instead finished his doctorate and began teaching computer science at the University of Chicago.) But mention the realm of travel search, and he leans forward on his haunches, slicing the air with his hands to make key points. "There are so many distribution channels. And the information is so dynamic," he says. "It presents a difficult technology problem to solve."
"A TRAVEL CONCIERGE."
Nestorov's search-technology ambitions go beyond culling more information sources faster. Mobissimo hopes to aggregate enough travel-related search data to begin offering more advanced travel advice. For instance, if a visitor is seeking flights from Los Angeles to Hawaii for two adults and kids, Mobissimo could scan its reams of search data to seek out other nearby beach destinations popular with families.
Or a visitor could simply request travel information from Los Angeles to "beaches," which would yield a variety of relevant travel destinations, from Puerto Vallarta to Hawaii. "It's like a travel concierge," says Tarka, who predicts that such functionality will be free and available on Mobissimo early next year. "There's so much information out there...we'll just keep pushing the envelope."
Even so, it'll be an uphill battle for Mobissimo. Just 1 year old, the company raised $1 million in seed funding in April. Now with 10 employees, it's looking for its next round of backing.
ADVANTAGE OVER MERCHANTS?
Although in a highly promising market, Mobissimo is still tiny. According to researcher Hitwise, Mobissimo is the 707th-most trafficked travel site on the Web, out of the 3,400 sites it monitors for this category. While a giant like Expedia.com snares about 8% of all travel-related Internet traffic in the U.S., Mobissimo now notches about 0.01%.
Still, optimism abounds among its backers. "This whole industry is going through a transition," says Anand Rajaraman, founder of venture firm Cambrian Ventures, which participated in Mobissimo's seed round. Rajaraman's bet is that a broader, more ubiquitous search tool will prevail in travel, vs. merchant sites of today that offer fewer possibilities and handle everything from billing to customer service. "It's not the right industry for merchants to dominate," says Rajaraman.
Such prognostications could bode well for Nestorov, particularly as he traverses some pretty cavernous footprints.
Elgin is a correspondent in BusinessWeek's Silicon Valley bureau