Uptake has been acquired by Groupon! We had been watching Groupon for some time, and admire how they created a powerful new business model, assembled a world-class team, helped consumers discover deals with increasingly tailored recommendations, and saw global, record-shattering growth along the way. Today, we’re delighted to announce that Uptake is now a part of Groupon.

Before we move on to this promising new opportunity with Groupon, we’d like to look back at what we’ve built and accomplished together – our tenacious and creative team, partners, blogger community, investors, advisers, and the 75+ million travelers that trusted our sites and recommendations so that they could enjoy amazing travel experiences.

Lasting more than four years, it’s been a phenomenal journey working hard to execute on our mission: to make it fun and easy for consumers to create and enjoy their ideal vacation. Our mission was rooted in the belief that consumers didn’t want to search for hours on end, but rather preferred a more thoughtful, interactive and personal way to discover and plan their travel – for example, to find the right hotel for the romantic escape or the best activities during their kid-friendly getaway.

Uptake was early to harness the Wisdom of the Crowd for online travel research and recommendations. Since the summer of 2008, Uptake has connected travelers with recommendations, driven by their preferences and intent, and drawn from the largest online travel library. En route, we developed patent-pending technology to aggregate, analyze and recommend reviews, articles and blogs from over 30,000 sites for activities, hotels and restaurants. And because travelers could discover recommendations based on their travel companies and preferences at Uptake.com, we became the third largest U.S. travel research site, behind only TripAdvisor and Yahoo! Travel.

In 2011, we discovered our technology also allowed us to uncover and organize the most valued source of recommendations – the Knowledge of your Friends. While reading reviews is helpful, whose opinions do you trust more than friends and family who have been there previously? While Facebook’s open graph initiative will structure your friends’ future travel history, Uptake was able to determine the past 8+ years of your friends’ travel histories to identify over a thousand destinations your friends have already been – without any additional work required!

All in all, we were able to combine the Wisdom of the Crowds and the Knowledge of your Friends – something no one else in the travel space has been able to cultivate to date.

Behind all of these amazing accomplishments was a stellar team of Crud-loving, problem-solving technology geeks who love travel, and travel junkies who love technology. Our new adventure at Groupon is possible thanks to the drive, energy and talent of the entire Uptake team.

We’re excited to jump in at Groupon right away – with our attention focused there, you may notice that some of Uptake’s features will slowly wind down. We hope you’ll use Groupon to continue to explore your city and fantastic places around the world.

We can’t thank you enough for all your support over the last four years! It’s been one heck-of-a ride.

All the best,
Gene & Yen

Tuesday, February 28th in the Year of the Dragon

Co-Founders Gene Mckenna and Yen Lee

Elliott Ng, co-founder of UpTake, wrote a great summary of PhoCusWright’s  Travel Innovation Summit. Here’s my uptake on Wednesday and Thursday’s Center Stage presentations, hallway conversations, and miscellaneous (usually unsubstantiated scuttlebutt.

Conflict and Opportunities Abound in Lodging Sector

If you believe Bill Carroll, Chris Anderson and Jake Fuller – and they have the data to support their hypothesis – the lodging industry’s recovery is 4 years away. There are number of reasons for this:

Lodging industry supply is increasing

Supply is still increasing. There are structural limitations (ownership and political) on why lodging rooms aren’t going to be taken out, discount expectations are hard to reverse, fragmented ownership inhibits price leadership and chain brand value and controls have been diluted. An excellent analysis that has implications for online travel ecosystem – the OTAs’ resurgence will continue, conflict between chains and franchisees will grow, and there will be interesting opportunities for businesses that can deliver enough opacity to disable best guaranteed pricing. The dynamics were similar in 2001-2003 when Expedia and Hotels.com dominated online hotel sales to propel into number one position.

OTA's reach a tipping point

What do you think of the Cornell (and Jake Fuller) analysis and conclusion that the lodging sector will be below the magical 60% occupancy line for another 4 years? And what new businesses will emerge and what other implications do you think there will be?

The Next 6-12 Months will Signal a LOT about the Health of Online Travel

The big event we were looking forward to at the start of 2009 happened – booking fees got cut. And the OTAs survived – and thrived (primarily by taking share from suppliers). Jeff Boyd, Priceline’s President and CEO has  Priceline and Booking.com dominating European hotels and growing almost 50% Y/Y. Dara Khosrowshahi, Expedia’s CEO  has the company growing almost 30% and well positioned given the ongoing hotel occupancy struggles. Barney Harford, CEO of Orbitz took the firm off death watch, cleaned up the balance sheet, raised $100M in cash and is driving Orbitz to finally build a hotel business. Fair to say the publicly-traded OTAs are doing well!

So why do the next 6-12 months matter? Because a number of later stage, private travel companies are primed to go public – Amadeus, Travelport have filed their S-1 and hired bankers respectively. Potentially four more have the size – but perhaps not the size AND growth – to go public: HomeAway, ITA Software, Kayak and Sabre. Will they try? Can they get public?

If they do, it certainly will help the earlier stage private travel companies. Most need to raise additional capital in the next 6-12 months, but if there aren’t some exits and some liquidity to enable acquisitions, it is inevitable that there will be a slew of travel start-ups going under. And even if there is more investment capital available or there are acquisitions as a result of some IPOs, as Brad Gerstner, founder & CEO of Altimeter Capital said, there will be a need to reset valuation expectations. E.g. Priceline and Expedia are growing at 47 and 28% and trading at 8-9X multiples. {Disclosure: UpTake is one of those earlier stage travel companies, and although we don’t need to raise additional capital until 2012, we are very aware that we will benefit from more travel companies going public and an improvement in valuation multiples}

Obviously HomeAway, ITA and Kayak don’t have control over the public markets, but they all have major initiatives underway that will materially impact their growth trajectory and perception from investors. HomeAway will start building awareness of the vacation rental category with an ad campaign – including super bowl ads! ITA is moving ahead with its new GDS and has additional search innovations (e.g. Needle) teed up. Kayak is building brand with their offline campaigns, building their hotel business to offset the cuts in booking fees, and investing to go deeper into the transaction process. Interesting times, big bets, big potential upside!

Who do you think will try and succeed in going public? What do you think will happen to the several dozen private travel start-ups that need capital in the next year?

Either Search & Discovery still needs improvement – or a lot of us don’t get it

There is plenty of  ongoing investment in new search and discovery:

• Amadeus’ Affinity Shopper, the winner of the Innovation Award with their dynamic packaging search-;
• Goby with long tail search, , my personal favorite – ;
• Voyij, my favorite runner-up is filtering the Twitter stream, compiling them into emails to slow down the real time feed and enabling me to find what I need when I have time to look;
• TripAdvisor, the investment closest to my heart,  Steve Kaufer discussed how TripAdvisor is investing in semantic search to deliver the gestalt of a product and save consumers the need to read 3,300 reviews on the Bellagio;
• Car Trawler on car rental comparison shopping;
• 10Best (VinePulse) on enabling hotels to search reviews from across the web about their hotel etc.

Disclosure – no surprise on this  (gasp!) UpTake is a search engine! We have aggregated content from over 5,000 local, travel and professional sites and done the ontology-driven attribute – e.g. ‘6 year old’ indicates a family related fact – and sentiment analysis – e.g. ‘loved the pool’ indicates a positive feeling so we can recommend products that best fit consumers trip preferences. For example, we return different hotels if you are looking for family hotels versus romantic hotels}

Are Goby, Voyij, Car Trawler, TripAdvisor, UpTake all search ‘hammers’ looking for search ‘nails’, or is there a real problem for the search & discovery companies to solve? What do you think they need to do to succeed?

TripAdvisor and Google are the 800 and 8,000 pound Gorillas (respectively)

Expedia has to battle Priceline, Orbitz and Travelocity and vice versa.

But up the travel funnel, there is less competition.

Google has crushed Yahoo Search. Bing is battling valiantly, but Bing’s pick- up 200 basis points of search (from Yahoo) to get to 9% market share hardly shifts the market dynamics (when Google has north of 60% market share). The three most successful online travel CEOs – Dara, Jeff and Steve (Kaufer – sorry Steve Hafner all mentioned their concern about Google (or Troogle – Google + Travel) and their dependency on Google (given 73% of travelers search and search an average of 10-12 times before they book). Even though Google has publicly said they aren’t entering ‘vertical search’ like travel, Google continues to extend their lead in related categories – e.g. maps, photos, video, the ‘local modules’ – and therefore increasingly influences online travel. A benign 8,000 pound gorilla (generating over $2B a year in lead generation revenue from travel), but growing larger as each PhoCusWright comes and goes.

TripAdvisor is as dominant as the ‘second click’ for travel research as Google is as the starting point for travel research. Already dominant domestically, they have quietly launched localized versions globally over the last two years and are estimated to generate over $300M in 2009 revenue and $200M in operating income. And they too, are extending their lead. In the last year, the TripAdvisor Media Group has expanded into China further with the Kuxun acquisition (already owning DaoDao), launching flight metasearch, getting into deals (via SmarterTravel), and driving into the vacation rentals sector. Fortunately, TripAdvisor continues to be collaborative with the rest of online travel, but like Google, they continue to extend their lead.

In an industry where size (of market share) matters, Google and TripAdvisor are dominant. What does that mean for the long term health and balance of the online travel ecosystem?