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Yahoo enters travel market

Yahoo extends its reach on the Internet, this time in the online travel business.

Yahoo (YHOO) today extended its reach on the Internet, this time in the online travel business.

Already veering from its search engine business by launching a slew of city guides, as well as a popular sports and stock quote site, Yahoo continues to explore its content potential with an online joint venture with Travelogix, a travel services company. Competition is intense, however, and the market is getting crowded--both from airlines and other online travel agents.

Using Yahoo Air Travel, customers will have access to flights from all airlines 24 hours a day, delivery of tickets, as well as a customer support team to answer any questions that may arise. Flights are booked and purchased through the Travelogix online travel network but carry the Yahoo brand name. Financial terms of the arrangement were not disclosed.

"With comprehensive information and an easy-to-use booking system, Travelogix provides Yahoo Air Travel users with all the resources they need to research and make airline travel arrangements online," said Bob Forsyth, chief executive officer and president of Travelogix, in a statement.

The growing online travel industry has generated much interest in the year since the Microsoft-backed Expedia site joined Preview Travel and Internet Travel Network, among others, in offering booking, "fare surfing," and special online discounts to travelers using the Web.

Airlines such as Southwest and Alaska Airlines let passengers book and buy tickets online. TWA, Continental, and United also have Web sites that provide flight information.

However, these sites (and all e-commerce in general) continue to be plagued by general skepticism about security. Some customers also have complained that it still takes too long to book a flight online and that some sites are too hard to navigate. Fare wars also can lead to a surge in demand that creates delays, such as a recent price cut by American Airlines.

Despite rapid growth, online travel bookings currently represent only one percent of all airline tickets sold. Yahoo's entry into the market is another endorsement of the moneymaking potential from online travel, though. It also shows Yahoo's continued push into providing online content, much like online services.