TravelNow.com goes public with a splash

by Paul Flemming

SBJ Staff

It's a little bit of Silicon Valley on Park Central East

Springfield-based TravelNow. com Inc. was founded in 1995 by Jeff Wasson and Chris Noble. In its first year the Internet travel booking service grossed about $9,000, according to one of its investors. July 23 it completed a merger that made TravelNow a public company. At Aug. 4 closing prices, the company had a market capitalization of $87.1 million.

"A year and a half ago, people didn't know on Friday if they'd get a paycheck. So, even to have (wealth) on paper is fun," Wasson said.

Bill Perkin was an early investor in the company, writing checks to cover payroll during lean times at the startup. His advertising agency also did work for the company and took stock in lieu of cash payment.

"Everybody now is going to look at it as an overnight success, but there was an awful lot of blood, sweat and tears shed to get to this point," Perkin said.

When the stock opened trading as TravelNow.com it sold at $5.125 a share. The stock closed at $8.4375 Aug. 4.

"Anything Internet is being traded at a higher multiple than reasonable people would say is reasonable," said Wasson, president and chairman of the board of TravelNow.com.

There were about 40 shareholders when the merger was completed, including officers, investors and employees, some of whom accepted stock in lieu of pay earlier in the company's history. Most shares held by those associated with TravelNow.com are restricted and cannot be sold for a year after the merger creating the public company.

"The first day everybody was really interested" in the stock price, Wasson said. "But I think everybody now has settled back É looking at the things that are fundamentally important to our business. This company is really rooted in the fundamentals, concentrating on revenues and growth."

The fundamentals of TravelNow are hotel reservations, car rentals and airline ticket sales made by clients who visit its site at

www.travelnow.com

or use its system through the more than 10,000 strategic alliances the company has with other Web sites. The company's physical location in Springfield occupies two floors of the McDaniel Building downtown.

Wasson said about 85 percent of the company's revenue derives from hotel reservations, 10 percent from car rentals, 4 percent from advertising and 1 percent from airline tickets. Its revenue comes from commissions paid by the 40,000 hotels, 60 car rental agencies and 200 airlines for which it makes reservations.

The 10,000 Web sites that feature links to the TravelNow system share evenly in commissions on reservations that originate through those sites. The company's programmers work with its affiliates to make the reservation system look like affiliate sites. "We're the engine and they wrap their car around it," Wasson said.

TravelNow pursued this affiliate-network strategy in contrast to its competitors, who have sought clients with national advertising campaigns.

"We're actively and aggressively seeking affiliates," Wasson said. "We have a sales force that gives away a product."

Before formal, audited financial filings are made with the Securities and Exchange Commission, TravelNow executives are precluded from discussing the company's revenues. Audited financials will be filed within 75 days of the July 23 merger.

Wasson said revenues have grown 10 percent each month since January.

The merger that resulted in TravelNow.com Inc. is a transaction with a moribund Florida public company that traded on the NASDAQ over-the-counter board. Sentry Accounting Inc. of Lakeland, Fla., acquired TravelNow[[In-content Ad]]