Smartphones and Tablets Force Travelzoo to Rethink Its Business

Travel companies, like other e-commerce firms, are having a rough time navigating the transition from desktop to mobile.

Just ask deal-publisher Travelzoo.

The company announced January 8 that it hired an eBay executive, Eddie Garcia, as Travelzoo's senior vice president of product development, with prime responsibilities for shoring up its search business.

Travelzoo's search business primarily takes in its Fly.com metasearch site, and Travelzoo.com's SuperSearch feature, which has browsers/ads opening in separate  windows.

The reason for the change?

Travelzoo said the the deceleration in its search business segment is intensifying, and that in the fourth quarter of 2013 it expects to report a 25% decline in search revenue compared with the fourth quarter of 2012.

That would mean that its search revenue in North America and Europe would have fallen 25% to some $4.65 million.

The key reason Travelzoo's search revenue is plummeting is "users migrating to search via mobile," the company said.

In other words, as more users access Fly.com and SuperSearch via mobile devices, Travelzoo's cost-per-click revenue declines because mobile lookers don't convert into bookers as frequently as desktop lookers do.

It's a problem that virtually all travel companies are facing.

Travelzoo has three business segments, namely travel, local deals and search, and search is the smallest business line.

Garcia worked at eBay since late 2003 and held several product- and search-related positions.

His hiring at Travelzoo is designed to help better-monetize the company's search business.

That is the hope.