21 October 2006

Go for it O'Leary! Let Ryanair buy Aer Lingus

I am not a huge fan of Michael O'Leary personally. I don’t know the chap and cannot pretend to understand the way a mild mannered accountant turned into the PR monster that he seems to have become. But the haughty voices should pipe down.

I do think the Irish Government and the Labor unions should just put up or shut up about letting Ryanair takeover the Irish national airline. It is high time the airlines and government interests were severed. But the government of the Republic of Ireland cannot have its cake and eat it too. Let the market decide. So if the unions and the government want a cozy deal then write the law accordingly and take the wrath of Brussels and the Iron Lady Neelie Kroes. Since that is not going to happen either Dermot Manion better find a white knight and soon or embrace the best chance Ireland has of having a seat at the big boys table.

I firmly believed that Ryanair would be the last airline to adopt the HVC - Hybrid Value Carrier model. The outstanding job of making an airline consistently profitable via the LCC model has been pursued with relentless passion by O'Leary and Co. But the opportunity in front of them with the potential acquisition of EI makes perfect sense. If this is truly going to be Michael's swansong before he kicks himself upstairs then more power to him. I believe it will be great for the industry and great for the traveling public. Well OK so the customer service will suck but what do you expect for 99 cents.

Let's stop the whining and see real change and value come to the market.



The great unwashed - the coming luddite rebellion

Travel 2.0 is here screams PhocusWright. Who what where??? In fact it isn’t here and nowhere near here.

What we have is in truth a fragmentation of the market that continues to fragment rather than improving the lot of the consumer. Travel 1.0 did a great job in automating the simple stuff - point to point even "dynamic packaging" which is in reality dynamic pricing is also pretty stable and usable. However step outside of the realm of anything normal and you end up in what used to be known politely as Hushunga. Travel 1.1 and 1.2 are not much better than Travel 1.0

From the perspective of the user - the service to know if I can get the lower fare with full information - it really doesn’t exist. Consider the following scenario.

I can see on Orbitz whether or not a flight has a seat map that I can use. IE SEATS AVAILABLE. However if I use the seat map on Orbitz I get crap results even if I am a 1K or Premier Exec member. On United.com I cannot see what the good seats are until AFTER I after I have purchased. So it results in a phone call to Res. Oh yes and where is that famous new whopi dido IBE they signed up for in 2004 from Datalex?

I fly a lot of international flights. Well guess what - that is a diabolical experience. I am really unsure which is worse - the call wait, the awful announcements and stupid Audiotex navigation or the complicated UI/UE. Really they all suck. Yet this is the primary interface for selling your product to the consumer. HEY AIRLINE ARE YOU PAYING ATTENTION???

The Luddites are not happy. Consider the large and oft ignored high end and just plain unsure users. As you see adoption of online tapering off - we are now in saturation mode. IE the players are playing steal from each other or share shift rather than channel shift.

Yes friends AIRLINE AND TRAVEL WEBSITES all suck. Well most of them anyway.

So let’s hope that the powers that be are now going to pay attention and fix it. Make no mistake it’s going to be very hard. I don’t think we are going to see the solutions coming online for quite some time. At least another 3 years. In the mean time go with simple (if you want my advice). Think Southwest and Alaska. For multi-site shopping I love www.skyscanner.net. But they are all pretty bad or more likely incomplete.

Can we do better... yes. Lets at least try



19 October 2006

That giant sucking sound is Google

OK so we cannot possibly let the new atronomical number from Google pass without a comment. It is now clear that the number is fueled in significant part by the Travel Industry. So all that keyword bidding for Hawaii (especially Europe and Asia as they come on line) ... yes thanks to all of the meta search engines... yes its all that cash being sucked up by the Google Vacuum cleaner.

I remember a time when we used to laugh that there was never going to be a problem with the internet as the real estate was limitless. Wrong picture. The directory proved to be the choke point.

Not that I begrudge them the business model. Far from it. Google has proved itself a worthy successor to the Microsoft mantle. The gotta have it and cant live without it stuff of the 80s and 90s is now Google space.

But it is now time to develop an alternative. As we reach maturity in the market for online travel - where the channel is no longer the relevant issue - it takes smarts to find better ways to mine and nurture customers.

So for disruption we can only look in 2 places - innovation and the government. Will the Government launch a probe into monopoly practices at Google. It you think that there was a case for the Microsoft and AT&T probes then surely there is one for Google. But - well the Bush Administration is a little preoccupied with another matter so they wont do it. On the other hand Mr Spitzer in NYC might be very tempted to take a look. Especially given his aspirations for 2008.

In the mean time lets just keep shovelling the cash into the Google machine. Sergey and his partner can then fix the old Qantas 767 up nicely and maybe even invest in Space Wire. Or perhaps do some good with the cash.



18 October 2006


It was the late 90s and the seats were filling up. Every bus company from Everett to Tacoma had loaned buses to the Richest Company on the planet. Yes it was time for the annual Microsoft Company meeting. The Kingdome was resonating with the sound of a chant and the accompanying stomping of feet, a cacophony of noise that rose from stands and up to the roof… SPLIT SPLIT SPLIT…
For the faithful it was about splitting the stock so it could continue its almost inexorable climb to those same rafters.

Well now those same faithful need to start the same chant, but this time with a different slant. SPLIT SPLIT SPLIT.

I am advocating one or even two totally different meanings – but both with the same end result - rebuilding stockholders equity.

Microsoft has become too big, too fat and just like its software very bloated. For any of you brave enough to evaluate Office 2007 you will understand. I don’t advocate that the Justice department should step in and demand that the company be split up for anti trust, no I believe that the largest block of shareholders – current and former employees – should demand that their stock be given its head and allowed to move upwards again. With Bill retiring now is time for his biggest baby to be free.

The way to do that is not by giving away the cash. No rather let’s see the company reinvest that cash in competition and innovation – Just like Bill and Steve say they are.

So here is my proposition:

Microsoft will be split into 5 separate businesses.

Enterprise software
Operating Systems and Tools
Office Software
Consumer Products
Online Services

Each of these would be given its own mandate to go and conquer. These would be truly Baby Bills. Each of these businesses would be able to generate in excess of $1Bn worth of revenue a year. Better yet they could start competing with each other. The benefits would be enormous. Re-galvanizing the markets – forcing the spotlight onto Larry Elison and his empire. Retaining talent. Giving smaller companies a chance to innovate and compete.

Finally Bill – time to step down. SPLIT SPLIT SPLIT and focus on the challenge of changing the face of philanthropy. No one cares really any more if you are a better architect or chairman. But they and millions of people round the world do care that the Bill and Melinda Gates foundation does stand for something truly unique. Change the way the world works. You have started there.

It is time for a change. Let’s see what that next generation of smart folk can do. In just the same way as Microsoft came into being – so it should exit. Fast and with dramatic effect. The new resulting Microsofts I firmly believe will change the way we do business. Peter Drucker once commented that Automation was probably the biggest loss making business in the commercial history of the world. But the change it has wrought on our lives and social fabric can not be calculated. Time for a change. Change is good. SPLIT SPLIT SPLIT…

Timothy J O'Neil-DunneManaging Partner - T2Impact Ltd