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Dot-coms have a history of going into a tailspin, but business at Travelocity.com is clipping along. Helping steer the course in the tricky economy is Andrew B. Steinberg, the executive vice president of administration, general counsel and corporate secretary of the Fort Worth, Texas-based Internet travel site. Steinberg credits the company’s success with a management team whose members work well together and an approach that doesn’t pigeonhole executives when they discuss ways to improve their services. He’s open to ideas on legal matters from his nonlawyer colleagues and, on the flipside, his suggestions receive the same consideration. “I’m as often the generator of new ideas as the recipient,” Steinberg says. “No one is limited by their particular background. If I propose an idea, I’m not just ‘the lawyer’ speaking.” Steinberg heads the company’s legal department and supervises four attorneys, two paralegals and two assistants. In addition, he oversees another 35 employees in the human resources and facilities departments. He is one of nine officers who run Travelocity, which has approximately 1,600 workers at five locations, about 1,200 of whom are call center employees who assist customers. As the top lawyer at the company, Steinberg handles corporate and contractual business; intellectual property matters, such as trademark disputes; regulatory and competition issues; and employment matters. There is no typical day, which generally starts at 8 a.m. Steinberg, who is married and has two children, also works at home via e-mail after the kids are in bed. The company’s executives operate on a consensus basis with lots of discussion. Steinberg likes it that way. “It’s an incredibly collegial group that works well together,” he says. “That’s the best part of the job.” Steinberg also works with outside counsel as part of his job. Dallas-based Locke Liddell & Sapp handles corporate work; Los Angeles’ Gibson, Dunn & Crutcher helps with litigation; and Finnegan, Henderson, Farabow, Garrett & Dunner in Washington, D.C., handles intellectual property matters. Russ Coleman, a Locke Liddell partner in Dallas, says Steinberg is an outstanding lawyer and executive. “He’s very analytical,” Coleman says. “He’s got a strong intellectual curiosity about things. We like to come up with ideas and we reason through things. How can they be improved? How can we do it differently? He approaches things from a scientific perspective.” This approach helps make Steinberg a strong leader and leads to creative solutions, Coleman says. Travelocity started in the spring of 1996 as part of Sabre Interactive, a Fort Worth company that provides computerized reservation services. Steinberg, who was Sabre’s senior vice president, general counsel and corporate secretary, joined Travelocity in early 2000 when it spun off as a publicly traded company. Sabre Holdings Corp. controls 70 percent of the voting stock and the rest is public. Based on gross revenues, Travelocity is the Web’s largest travel agency, Steinberg says. The company offers airline tickets, train tickets, rental car and hotel reservations, and cruise and vacation packages online. Through its Web sites, travelers can compare prices and obtain information about their destinations. In addition to its main U.S. site, Travelocity operates sites for customers in Canada, Germany and the United Kingdom. Company reports show that for the quarter ending Sept. 30, revenues were $78.5 million, compared to $53.4 million for the third quarter of last year and $82.3 million for the prior quarter. Gross bookings, or the total purchase price of all travel services booked through Travelocity Web sites, were $2.5 billion in 2000. The company’s sources of revenue are payments from Sabre and travel suppliers for services that are booked, such as $5 for a one-way ticket and $10 for a roundtrip ticket, and advertising. In addition to the ads on the company’s Web sites, Travelocity sends a bon voyage message to its customers, which includes ads and destination materials. “Suppliers like that,” Steinberg says. “You can target people who are interested in your services.” He adds that Travelocity is one of the few dot-coms that has managed to make money by selling ad space. One of the secrets to the company’s success is that it gets revenue from several sources, instead of depending on ads alone, he says. Terry Jones, Travelocity president and chief executive officer, says Steinberg’s abilities extend beyond the legal arena. The two have worked together for a decade, since they were both at American Airlines. “First, he really is an advocate of the customer,” Jones says. “At many of our staff meetings, he will bring up areas of the site he feels can be improved and has ideas on how to do just that.” Steinberg also has helped with suggestions on improving supplier relationships, making organizational changes at Travelocity and crafting a revised mission statement, Jones says. BUSINESS METHODS There have been a few bumps in the road. With the economic downturn and the Sept. 11 terrorist attacks, travel has declined. Steinberg says that as a last resort to cut costs, Travelocity recently closed its Sacramento call center and let go the 280 employees there. The company still has call centers in San Antonio; Plains, Pa.; Clintwood, Va.; Ottawa, Ontario; Stansted, England; and Munich. It also has offices in San Francisco and New York. Steinberg has been involved in a dispute over business method patents. Some critics allege too many companies are trying to obtain intellectual property rights for putting existing business methods to work on the Internet. Examples include patents for the operation of a fantasy football league over the Internet, targeted banner advertising and the “name your own price” service offered by Priceline.com. In April, Steinberg joined the critics in testimony before a subcommittee of the U.S. House Committee on the Judiciary that was studying the issue of business method patents. He said that although Travelocity doubted the validity of the “name your own price” patent, also called a reverse auction, it would have risked litigation if it implemented the system. Instead, Steinberg said, his company reached a marketing referral agreement in which Travelocity customers who wanted to propose a ticket price can follow a link to Priceline. “Of course, there were several factors behind our agreement with Priceline but certainly an important factor was our reluctance to deploy a reverse-auction capability ourselves and possibly become involved in a protracted and expensive lawsuit,” he testified. In an interview, Steinberg says that business method patents will lead to less innovation and higher costs, as companies start patenting what they do in order to protect themselves from litigation. Steinberg, who says that he testified as a private citizen, adds that this is not a make-or-break issue for Travelocity. Steinberg, 43, earned his undergraduate degree from Princeton University in New Jersey in 1980 and his J.D. from Harvard Law School in 1984, then went to work as a law clerk for a federal judge in Los Angeles. He stayed in Los Angeles, first taking a job with Kadison, Pfaelzer, Woodard, Quinn & Rossi, then one with Gibson Dunn. While at Gibson Dunn, Steinberg worked on an antitrust case for American Airlines and Sabre. In 1990, he accepted a job as American’s first in-house antitrust attorney and moved to its Fort Worth headquarters. He was associate general counsel there when he moved into the Sabre position. Steinberg says he appreciates the benefits of both types of practice. An attorney with a firm gets to work in-depth on legal issues and spend a lot of time studying the law, plus has a variety of matters to handle. A general counsel is part of an executive team and serves one client, he says. As general counsel, he gets to participate in company decisions and see the results of his work down the road, Steinberg says. “It’s very rewarding,” he says. Steinberg travels on business a few times a month and always makes his reservations through Travelocity as a way to test the product. “We’re constantly improving,” he says. “Travel is a particularly complex transaction. The consumer doesn’t see all the widgets turning.”

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