July 7, 2008

The vertical ad network, founded in 2003 by CEO Cree Lawson, has experienced strong traffic growth in the past year. In May, the travel-information category grew 9% to more than 47 million visitors, led by the Travel Ad Network with 11.7 million visitors, which was up 7%, according to comScore.

Most of the online travel agency sites -- such as Travelocity, Expedia and Orbitz -- while providing a way to efficiently book passage or flights or hotels, are failing to provide more comprehensive services for travelers.

The niche sites in the Travel Ad Network attempt to drill down into various travel subjects to provide ideas, peer reviews, and other information to promote better travel experiences.

As a result, the industry is seeing a migration of the medium from a booking tool to a planning tool, which has resulted in increased fragmentation. In response, the OTAs have changed from running from fragmentation to embracing it.

Expedia's TripAdvisor, for example, recently acquired Virtual Tourist, the latest in a long line of "long tail" acquisitions like SeatGuru, Travel Library, Travel Pod. Priceline also has been buying niche booking websites like HotelsByCity.

In April, the Travel Ad Network completed a $15 million first round funding -- led by Rho Ventures, Village Ventures and individual investors - which it's using to support general growth efforts, including the development of new products and establishing itself in additional, though unspecified markets.

Separately, last week, Orbitz Worldwide said its Orbitz.com and ebookers.com websites have replaced Expedia Inc as the travel agencies for Microsoft Corp's Internet arm MSN.com.

The change, which Orbitz said could bring about 3.5 million visitors per month to Orbitz via MSN Travel, represents a blow to Expedia, which began life in 1995 as a Microsoft company.