Travelocity Locks Up Yahoo

Travelocity.com put a lock on its exclusive relationship with Yahoo, signing a deal that expands its existing (and exclusive) alliance with the Sunnyvale, Calif.-based portal to include a new marketing services program.

Fort Worth, Texas-based travel services company Sabre Holdings , which bought up all the shares of Travelocity last spring, said that the companies also plan to work together to “develop travel solutions for the millions of individuals, travel agents and travel suppliers that rely on the firms’ extensive networks.”

Financial terms of the arrangement were not disclosed, but both companies expect to benefit. In fact, Yahoo CEO Terry Semel told the Wall Street Journal that he expects the agreement will help boost revenue and profitability for his company , which has been actively trying to seek additional revenue streams as Internet advertising went into decline.

Travelocity, of course, continues to be the exclusive air, car, and hotel booking engine on Yahoo Travel.

But now the companies expect to integrate Sabre’s technology and content into Yahoo Travel, and the first step is a redesigned front page that includes a new color scheme, header navigation, merchandising placement, and a more intuitive user interface. The companies will share transaction revenue for sales at the site.

“By building on the strong Travelocity relationship with Yahoo, Sabre can more broadly market travel and continue delivering value to suppliers and travelers across multiple distribution channels,” said William J. Hannigan, chairman and CEO of Sabre.

Other components of the deal include a new marketing services program that will feature contextual integration throughout the Yahoo network including online advertising, keyword search and direct marketing programs.

Sabre also plans to work with Yahoo’s Enterprise Solutions division to develop broadcast and business communications apps to support Sabre’s network of 7,000 employees and 250,000 individual travel agents, and to jointly develop new travel products.