Questions : EXIT STRATEGIES

➢ In your opinion, if it proves to be a failure, which exit would be the best for Etrip : The acquisition by a supplier, such as an airline, the acquisition of or the merger with another travel gateway earch engine, the acquisition by a customer or the issuing of public shares?

I think that the amount of spent money was incredibly high for the resulting website. And I'm not sure selling it will bring back lot of money.

However, I don't know the technology behind the search engine. Maybe it can be a good idea to sell it to other companies as a new software solution to improve their performance.

Since Etrip does not really overlap with its competitor's segments (Etrip is focused on low cost companies when its competitors are not), merging with a competitor would be in my opinion the best way to preserve Etrip's value.

Vincent_Alliaga wrote:I think that the amount of spent money was incredibly high for the resulting website. And I'm not sure selling it will bring back lot of money.

However, I don't know the technology behind the search engine. Maybe it can be a good idea to sell it to other companies as a new software solution to improve their performance.

I read that companies choose to create partnerships with corporate customers to improve their websites. Indeed some of them possess better e-technology that the company itself.

A merger can also improve the customers' databases. E-trip can reach more customers, improve the visibility and at the same time, keep its own competitive advantage.

I don't know if it's the same in other countries, but in France a merge can lead to HUGE personnal rights issues : you can't merge so easily customers database.

and Why do you think e-trip competitors have already merge if it is so expensive? I mean advantages should be much more interesting that the disadvantages otherwise no travel websites will merge.

kathia Morano wrote:and Why do you think e-trip competitors have already merge if it is so expensive? I mean advantages should be much more interesting that the disadvantages otherwise no travel websites will merge.

Actually, I'm not sure all mergings were made by choices And I wasn't saying it's expensive... I'm saying there are a lot of database issues who can make merging to be impossible.

I was trying to enter to Etrip webpages and I have tried to use it, I was really surprised because I didn't find any value to its website (at list from the customer's point of view), it's too difficult to access to the service and all the time it has error messages.

Would another company really acquire Etrip?

I think Etrip doesn't have too much to offer to the market, the low cost airline's websites are simpler and more effective, additionally there are another websites, for example edreams.com or volagratis.com, with a better service and they have a database of not only low cost airlines, but of regular airlines, too.

By the way, if another company decides to merge or acquire Etrip, it should evaluate very good the internal information or its sofware potential in case it hasn't been exploited yet.

luis_guerrero wrote:I was trying to enter to Etrip webpages and I have tried to use it, I was really surprised because I didn't find any value to its website (at list from the customer's point of view), it's too difficult to access to the service and all the time it has error messages.

Would another company really acquire Etrip?

I think Etrip doesn't have too much to offer to the market, the low cost airline's websites are simpler and more effective, additionally there are another websites, for example edreams.com or volagratis.com, with a better service and they have a database of not only low cost airlines, but of regular airlines, too.

By the way, if another company decides to merge or acquire Etrip, it should evaluate very good the internal information or its sofware potential in case it hasn't been exploited yet.

Just to say that Luis created a specific topic for this issue, if you want to comment on this, please go on his topic

I agree with Iuis. If Etrip do not privide some innovative ideas for value-added services or have enough strength both in technology or in acquiried cutomer information, it is difficult for them either to sell or to merge.

In pg. 19 lists the first year product of Etrip, which are email search, short message search and price alert. Most of these services have been already developed by telecom service providers. Perhaps Etrip should sell their ideas to a telecom company who has mcuh stronger service development and R & D strenght than Etrip.

shirleyo wrote: I agree with Iuis. If Etrip do not privide some innovative ideas for value-added services or have enough strength both in technology or in acquiried cutomer information, it is difficult for them either to sell or to merge.

In pg. 19 lists the first year product of Etrip, which are email search, short message search and price alert. Most of these services have been already developed by telecom service providers. Perhaps Etrip should sell their ideas to a telecom company who has mcuh stronger service development and R & D strenght than Etrip.

My point exactly, partnerships with established companies that can prove experience in the field where E-trip has difficulties. However, I don't see why a Telecom company would want of a travel gateway in its assets... I can't imagine a telecom company buying Expedia...
Last point, as I mentioned, if you want to comment on Luis post, please go on the topic he opened! (just to clear it up a little bit)

Yann_Gerardi wrote:Since Etrip does not really overlap with its competitor's segments (Etrip is focused on low cost companies when its competitors are not), merging with a competitor would be in my opinion the best way to preserve Etrip's value.

I don t really agree with you on this point.
All search engine are offering flight tickets, as well for low cost companies than no low cost companies. Search engines have indeed evolved with travel trends. More and more people are looking for cheap tickets with low cost companies, you can also be sure it is the same for all search engines.

Therefore, i am convinced that it will be really hard for Etrip to find an acqueror, especially as it is not worldwide known, and is not really famous, and does not have any competitive advantages...

I totally agree with Florent on this point. A lot of search engines are more complete than etrip and I am not sure that the technology behind this website and the database are so unique.
Maybe a company who wants to enter this market could buy Etrip as a start point but else...

It looks like Etrip is already out the market and they didn't have any exit strategy before.
But, do you think they would have obtained something in the case they had planned an exit strategy?
I think, in the current situation, it's very difficult for Etrip applies any exit strategy, even in the case they have one. It looks that Etrip didn't have an "enter strategy" neither.

chloé_laluc wrote:➢ In your opinion, if it proves to be a failure, which exit would be the best for Etrip : The acquisition by a supplier, such as an airline, the acquisition of or the merger with another travel gateway earch engine, the acquisition by a customer or the issuing of public shares?

I think the best way is the acquisition or the merger with another gateway earch engine because this company will have experience to save etrip and to modify the business model to be a one which can create value.

To answer Luis question, I think if they had an exit strategy, they would have earned at least some profit from it. Even though their website if not user friendly or hard to navigate, I think that if they changed the website around a little to make it more attractive, they would be able to be acquired from a supplier. They would be able to use their consumers as an asset to the acquiring company.
You might say that this would cause problems with what if I remembered correctly Florent said, personal data and information. However, Etrip can inform their consumers about the acquiring and slowly have their valuable consumers switch to the acquiring firm of course after consent from the consumer. For example, when a company is being bought, they try to ease in their employees into the new environment of the acquiring company. It may be a struggle at first but after awhile, the employees ease into the new environment.
I think that exiting without and exiting strategy is just pouring money down the drain! Nothing gained and a lot is lost without using the potential of the company.

I think there is no exit strategy. Although the idea is great, the result is too simple and doesn't worth anything. So the acquisition or the merger with another gateway earch engine seems impossible. Look at what lastminute.com did. On their website there is a tab named "charter flights". So they're already working on these low-cost offers. Soon they will think about this x% offers and launch it by themselves...They don't need E-trip experience.

I just want to make a comment - why does the question say "if it proves to be a failure"? It seems to me, that for a small start-up who wants to expand and develop into something big, an exit could be a great opportunity. For example, if a big company decides to acquire e-trip and put a lot of money into it, this gives Etrip's team to actually get all the funding they need to be a full service provider, and fulfill their potential.

On the other hand, if an exit means that Etrip's team is leaving the project, it could also mean a good thing. This gives the necessary funds to start working on an even better start-up, a new project in which Har Adir and his team could implement their previous experience and acquired knoweledge and create something new. This is particularly true in the digital environment and ecommerce, where things change really fast and new trends take over. Who knows maybe in the future people will find some new and crazy way to but plain tickets ...

I think you are right Naomi but on the other way, Har Adir want to success byhimself without the help of a multinational which will eat the company immediately. A merger can lead also to new rules to respect, for example, sharing the customers' databases, focusing on a particular market even the company has not building its strategy on this particular market. The multinational can impose also their conditions, ( a tax who will increase the price of the ticket), change the name of the company and getting the name of the multinational, change the strategy that you have already work on it, change the philosophy of the company. E trip can totally change its equity and image.

I agree with you Kathia, there are definitely some trade-offs that should be considered when making an exit. However, it could give them the financial freedom they need to get to where they want in a way that they couldn't get otherwise.

And also, an exit could make those guys rich. Nothing wrong about that, huh?

If I'm Har Adir and someone offers me to buy Etrip for a good price, I would sell it inmediatly!... Etrip didn't have success, the only value thing that Har Adir can sell is the idea and the information he has, but Etrip for itself doesn't have too much value!

luis_guerrero wrote:If I'm Har Adir and someone offers me to buy Etrip for a good price, I would sell it inmediatly!... Etrip didn't have success, the only value thing that Har Adir can sell is the idea and the information he has, but Etrip for itself doesn't have too much value!

I agree. Especially with the latest evolves of Internet (html 5 for instance), the website seems now a bit old-fashioned...

A telecom company also intends to look for new development for value-added services from which to generate revenue. Since the travel industry has generated over $140 billion in sales in 2007 both in the US and Europe. I think that bridging telecom services and travel reservation gateway beef up Etrip's status.

Shirley has a point! I think that etrip has to have more creative ideas on how to keep the demand for their services and how to differentiate their services from other firms in the same industry. Sustained growth depends on how well you create a market for your services or products. Like Shirley said, telecom are reaching into developing new markets, bridging or being acquired would allow etrip to get more recognition or if they are acquired from the telecom allows them to make some money while it being their exit strategy!