Region a strong player in travel websites

September 20, 2009|Innovation Economy, Scott Kirsner, Globe Columnist

Book a cruise to Bermuda, research the top hotels in Sydney, or hunt for the lowest fare for a trip to Vancouver, and the odds are good you’ll be interacting with a Boston-area Internet travel company. The area’s online travel cluster has grown slowly - and quietly - since the mid-1990s.

But that under-the-radar profile seems like it’s about to change.

Kayak.com, which operates a popular price comparison service, is talking to investment bankers about the possibility of an initial public offering, and plans to spend $50 million on a splashy new offline marketing campaign later this year. ITA Software Inc. - which supplies the computing engine that powers many travel sites like Orbitz - is about to launch an ambitious new product that has been in development for five years. TripAdvisor, a Web-based trove of reviews and ratings for travelers, has been expanding into new markets. And a new company, Goby, plans to take the wraps off its site this week.

The oldest of the companies, Cambridge-based ITA, was founded in 1996 by Jeremy Wertheimer, an alumnus of MIT’s artificial intelligence program. ITA’s band of programmers got very good at collecting all kinds of information about airfares, schedules, and available seats, and made it possible to search for tickets in a way that was jaw-dropping for the mid-1990s. Instead of just looking at simple itineraries between Boston and Austin, Texas, for instance, ITA could tell you that you could save $100 if you were willing to fly from Providence, or take one airline down and a different one back.

Without any venture capital funding, the company was turning a profit by 1998, helping airlines serve up information about their routes and prices to customers on their websites.

“It was so hideously complicated to do that most people just said, ‘We’ll pay you to do it,’ ’’ Wertheimer says.

In 2006, ITA raised $100 million to fund a big undertaking: building a new reservations system for the airline industry.

“The big three existing systems date back to the 1950s and 1960s, and they were written to run on mainframes,’’ Wertheimer says. “We thought we should build an entirely new transactional system that would run on Intel-based computers, and be written in the 21st century.’’

He is close to an agreement with Air Canada to start booking tickets using the system next year.

Incredibly, Wertheimer says he hasn’t touched his $100 million war chest. While he knows new investors expect some kind of “exit’’ - like an IPO or a sale - he contends he doesn’t feel pressured to make something happen in the near term.