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The sky's the limit

Scotland has exceptional brand visibility worldwide, plus a proud history of innovation and influence.

What it doesn't have is actual mass-market global consumer brands.

Yes, there are Scottish names people the world over will recognise. In recent decades, Pringle knitwear, Highland Spring water and Walkers Shortbread have caused tills to ring around the world, including fast-growing BRIC and Middle Eastern markets.

But the restrictions of their sectors mean those great names are unlikely to reach the higher reaches of the Interbrand top 100 global brands, where Johnnie Walker – made but not owned in Scotland – flies the Saltire at number 92.

All of which adds sheen to the solid achievement of Skyscanner, the Edinburgh-based travel search website whose current rate and trajectory of growth puts it on course to overtake Expedia and Kayak to become the most-visited air travel site on the web in the next couple of years.

Ten years old this year, the £30 million-turnover firm is on course to join the elite club of global brands whose names are closest to the fingertips of purchase-minded browsers, like Amazon for book buyers or Spotify for music-seekers. But the scale of the global air travel market, with four billion seats available and $900 billion a year in revenues, means travel is by far the largest category in e-commerce.

Skyscanner, which received £2.5m funding from Scottish Equity Partners in 2007, works by searching millions of airline and travel sites, comparing each flight for relative advantages such as cost, time of day and date. It then offers to book the flights.

As well as an ever-increasing focus on mobile apps, Skyscanner has a series of improvements planned for 2013, related to car hire and hotels, "personalisation features" and voice-activated searches.

Around 30 million people worldwide now visit the site each month. This figure doesn't yet make it an internet giant (for comparison, about 400 million access Facebook each month), but Skyscanner is the largest travel website outside the United States and the fastest-growing worldwide. It is also the largest independent flight search engine in the world.

In 2012, the site generated $3.5bn for its airline "partners". This year's figure is expected to be at least $5bn. Due to be announced next month, Skyscanner's profits for 2012 are expected to be in the region of £13m – a figure projected to almost double in 2013.

Overtaking US market leader Kayak, which Skyscanner is expected to do in the next year, will mark a symbolic point on the company's medium-term plans for an IPO – a step it will take only after it has outstripped a shorter-term ambition to become Scotland's first web company to be valued at £1bn.

According to Gareth Williams, Skyscanner's founder and chief executive: "That £1bn is an important milestone for us and for the Scottish economy, as others will aspire to join us, or beat us - but really our focus is on user growth and revenue growth. We have no ambitions to sell the company."

Isn't that something that business owners say when they are considering precisely that?

"We are setting the business up so it can remain independent for the next five to 10 years. You can never tell what the future holds, but the management and board are all geared towards organic growth as an independent."

Williams, 43, is not from the aggressive, self-hyping school of web entrepreneurs, and plays down the ruthlessness of the e-commerce sector, where mis-steps or simply better ideas rapidly lead to oblivion (see MySpace or Pets.com), and where richer rivals constantly study or copy what you do. He comments: "My assumption is that Google will eventually have a flight search engine. You can't do much about death, taxes and Google."

Google does have a flight-comparison function, in fact, but only on its US site, using technology it bought when it took over software firm ITA for $700m in 2010.

In terms of development resources, Skyscanner is to Google what a gnat is to an elephant. Couldn't the "Big G" just swat away the aspirations of this upstart Scottish outfit with a flick of its tail?

Williams says: "Travel is a difficult domain and there are many things that Google has failed at. I have every expectation that we will continue to show a better range of flights; also we have a lot of other partners and potential partners in other search engines – Baidu in China, Yandex in Russia, Bing, Yahoo, they're all potential partners to whom we could supply services.

"The status quo doesn't work on the web. You are always at risk of becoming redundant. Our software is never finished. We release updates every couple of weeks."

IT's not surprising that he will not be drawn too far on Skyscanner's proprietary indexing technology, the in-house programming alchemy that gives users confidence they are getting a service and deals they won't find elsewhere. One international patent is pending and the firm is applying for more.

He talks more about "a passion for usability" as a founding principle, "the goal of making searching for flights and travel as easy as searching for books". The proof of that is in conversion rates – the proportion of buyers to browsers – which has doubled to 15% over five years, and the fact that 54% of customers are repeat customers.

"We show every airline in the world, including the budget airlines, and we have the best quality of coverage and range of prices. On top of that, because we store the prices ourselves, we can show innovative ways of searching for prices, like, 'Show me the prices to all European cities from Glasgow in the first weekend in June.' Our usability and quality of coverage and availability, in many countries and languages, have been key."

Skyscanner has made shrewd strategic decisions, for example, in its early embrace of mobile platforms. Its search app for mobile devices was downloaded for the 10-millionth time in September, and has been snapped up around 100,000 times a week more since.

Williams says: "One-third of Skyscanner usage is mobile users, and this is increasing as a percentage: in some Asian markets it's already over 50%. Mobile users tend to be more frequent users."

But even as it delays the day when someone threatens its market share as it is now threatening others, Skyscanner can afford to make heroic predictions thanks to the groundwork it laid in refining its software, adapting it to the 30 languages it serves. The company is predominantly an exporter, with 70% of transactions overseas: last year that was recognised with a Queen's Award for Export. Having won a dominant position in Russia, where it has two million visits a month, the main focus now is cultivating the fastest-growing markets, many of them east of Suez.

SKYSCANNER established regional headquarters in Singapore in 2011, and, conscious that the Chinese foreign travel explosion has barely started, it last year sealed a deal with the country's top search engine, Baidu, which has 440 million users, and opened an office in Beijing. East Asian traffic multiplied by up to 400% last year.

Nothing about what it sells compels Skyscanner to be based in Scotland and the firm has considered moving abroad for faster growth. Currently it has 160 staff in Scotland and 20 in Beijing and Singapore. That it decided to move to new headquarters at Edinburgh's Quartermile, and stay in Scotland, is arguably one of the most encouraging developments in the Scottish economy. It will draw national and global attention to the capital's technology cluster, inspire other entrepreneurs, and bolster claims about the country's rich human resources.

Williams says: "The future of the Scottish economy is tied to the development of new companies exploiting the internet and therefore the global economy." Doing this is not about creating strategies or a structure of support funds, but, he says: "It depends on web entrepreneurs getting stuck in."

He adds: "I do worry that start-ups concentrate on funding too much as an early goal of the company. Skyscanner didn't receive any external support until it was six years old. We had no friends or family money either. We shared salaries and bootstrapped our way to significant revenues, when we looked more worthy of funding."

He adds: "I believe the 'IT department' experience - discourages innovation and entrepreneurialism in tech people. We need more businesses where the IT team is not a separate unit supporting the company, it is the company." He says only then will a critical mass of the talent nurtured in Scotland cease to leak out of the country.

It would be ironic if Scotland's first truly global mass-market consumer brand was not identifiably "Scottish" and had no reference to our cultural or natural assets. It might symbolise the arrival of a new kind of IT-rich commercial economy, focused more on the future than the past.

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