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(c) Elliott Publishing.

Insiders and Outsiders
Kirby's Korner · October 29, 1999

For the third time in a row, this column has a breaking story. Priceline.com, the Web site where travelers can propose the price they want to pay for hotel rooms, airline tickets, and other goods, has sued Microsoft and its Expedia subsidiary for offering a system in which, well, travelers can propose the price they want to pay for hotel rooms.

The federal lawsuit is for patent infringement. Priceline owns a patent covering the business practices it claims are being infringed.

Even as an attorney, I find method patents such as Priceline's tricky and on the outer edge of the type of invention the patent laws were designed to protect. But patents such as this have been upheld by courts and are becoming more common as intellectual property becomes more valuable.

If the case is litigated, it won't be resolved for years. And even if Microsoft loses, I doubt we'll see the end of its Hotel Price Matcher service. A much more likely solution is that Microsoft (or what will by then be a separate corporate entity, Expedia) will license the disputed patent rights.

Then consumers will still have two places to go to try to match wits with hotel yield management experts, with each side trying to gain a dollar or two on the other.

As the online travel world becomes less of an experiment and more of a business, we'll see more disputes like this. We'll also see more squabbling within companies, resulting in what I've been promising to write about for three weeks now -- changes near the top of online travel firms.

Antoine Toffa of Trip.com is the latest president to leave a company he started. No one now says he was forced out, but Toffa says there were disagreements between him and the board of directors about how fast the company should move forward with certain projects.

The founder and president of Trip.com rival Biztravel.com, former American Express executive John Williams, relinquished his CEO title last spring and, three months later, left the company. Before Rosenbluth International bought the company recently, an official said Williams had been working with a flawed plan. He originally thought the Web site would make money off commissions from airlines and other travel suppliers. The airlines haven't played ball, and Williams evidently never rethought his plan.

Ken Swanton, an executive with years of experience with brick-and-mortar travel agencies, appears to have been eased out of the presidency of what was then called Internet Travel Network and is now GetThere.com. A year ago, as the company moved more from taking reservations from you and me to providing technology that processes reservations for corporate travelers (and consumer Web sites), he was "promoted" from president to vice-chairman of the company, and he later left.

These are typical examples of why top execs move on at any company -- a change of focus at the company or a lack of insight by the leader. In the fast-changing world of online travel, more of these will occur.

One I'm not looking forward to is Jim Hornthal, founder and chairman of Preview Travel, leaving his company when it is acquired by Travelocity.com. Under the new regime, he'll be vice-chairman of the combined entity.

I base my assumption that he'll leave on no inside knowledge, just my familiarity with Jim and the two companies. He was the driving force behind Preview Travel and is still the best spokesman the online travel industry has. But I can't see him playing second, third, or fourth fiddle in a newly reconstituted orchestra.

If he leaves Travelocity, I hope he'll keep his attention on the online travel field. He's already dealing with industry-wide issues, having spearheaded the creation of the Interactive Travel Services Association, so he might.

For all you industry insiders reading this column -- and we know who you are! -- let's start a contest. How many days after Travelocity finally buys Preview Travel will Hornthal leave the company? Entries are due before the purchase becomes final.

While you're at it, suggest an appropriate prize, too. We surely know some company that can afford to bankroll a five-day vacation package!

David Kirby is the editor of the Interactive Travel Report. His column appears on Friday. You can reach him at dbkirby@pressroom.com.