Orbitz's Long, Strange Trip To A New Online Platform

The online travel company has been bought, sold, taken public twice, and left with an IT mess. Now it's betting on a major tech upgrade to smooth over all that turbulence.

John Soat, Contributor

February 7, 2008

2 Min Read

Orbitz began rolling out Austin last year, starting with the Ebookers site in England. "The new Web site aims to make booking decisions easier through simpler navigation and more product choice," the company said in a release. Hooking into the Orbitz system, for instance, tripled hotel inventory available to Ebookers customers.

At its most demanding, 280 developers were working on the Austin project, and Orbitz acknowledged "construction in progress costs" of $47 million in a third-quarter SEC filing. "It's consuming a huge amount of our capital," says Nelson. About two-thirds of the company's 300 full-time IT people are still working on aspects of it. "This is the most important asset we have," says Staehler. His team of developers "can't get there fast enough," he says.

One reason Orbitz is in such a hurry is that the online travel industry isn't standing still. Kayak.com, an online travel search engine, raised $196 million in financing last December to complete a merger with SideStep, a similar company. Travel search engines like Kayak, which can operate across platforms, threaten online travel sites with some of the same disintermediation that travel sites brought to travel agencies years ago. And some observers wonder when, not if, the 800-pound Internet gorilla, Google, will enter the online travel market.

Still, Nelson's not promising Orbitz will complete the U.S. rollout of Austin this year. "We're trying to accelerate this as much as possible, but it's a huge task," he says. "You can only throw bodies at it so much, and that doesn't mean it's going to happen any faster." In fact, Orbitz laid off 40 employees last month, half in the products group and half in IT.

The gang of five isn't worried about losing its leader, Koohestani. Winthrop Short, a technology director who's been with Orbitz for seven years, says, "We all own [Austin] and we're all going to make it happen."

That night, though my flight is delayed--not unusual for Chicago at Christmastime--I made it home without too much inconvenience. Orbitz is hoping for a similar travel experience.

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