Ebookers Scraps Ad Alliance with AOL Europe

31 July 2001

Online travel agency Ebookers.com has scrapped its costly ad partnership with AOL Europe as it edges towards profitability.

Forged in February 2000 before the internet boom imploded, the deal – one of Europe’s biggest – made Ebookers the ‘tenant’ advertiser on AOL’s European sites, at a cost to the travel firm of up to £15 million ($21m).

However, Ebookers yesterday revealed the campaign had not attracted as many customers as anticipated. AOL has agreed to end the alliance six months early, with Ebookers henceforth focusing on offline advertising.

“Why should we spend all this money on online marketing – all we are doing is making other online companies profitable, when they should be making us profitable?” complained Ebookers chief executive Dinesh Dhamija. “Get the customers offline and then give them incentives to buy online – that is how it works.”

The news comes as Ebookers posted a 110% year-on-year rise in sales for the first half of the year. Driven by a strong performance in the UK (which accounts for 60% of the company’s sales), turnover more than doubled from £35.1m last year to £73.5m, while pre-tax losses narrowed 7% to £18.5m. The company expects to enter the black by Q1 2002.

News source: Financial Times