When the Google-ITA Software deal was first mooted in late-April 2010, Expedia CEO Dara Khosrowshahi appeared to reasonably relaxed about the whole thing.
First of all, Khosrowshahi hinted that Orbitz, not Expedia, should be more worried about any potential deal as it relies on ITA’s QPX system for flight search.
“From our standpoint, we don’t feel too exposed,” he said at the time.
Fast forward a few more weeks and Khosrowshahi sharpened his view ever so slightly, claiming “it’s not something we are particularly worried about” if Google continues to work with advertisers in the manner it traditionally has done so.
But since the deal was announced on July 1 and the ramifications explored and pored over intensely, darker clouds have appeared over the Bellevue, Washington-based Expedia Inc.
Chairman of both the Expedia board and also former parent company IAC/InterActiveCorp, Barry Diller, now says the planned acquisition of ITA is “disturbing” in the general overview of Google moving into vertical markets.
Speaking to the UK’s Financial Times [registration required], Diller says:
“It is a dangerous step because it is inevitably going to cause problems with customers and regulatory authorities.”
Diller goes as far to say the deal is a “full frontal assault on a core area of the internet life” – no doubt drawing reference to Google’s – until now, it appears – holier than thou ethos to sit in a neutral position in terms of travel search.
He goes on to say that the deal should either be killed by the regulators or conditions imposed. This is clearly a substantial ramping up of disquiet over the deal from the lukewarm comments earlier from Khosrowshahi.
Diller is by far the most high profile figure in the travel industry to wade in with a less than favourable reaction to the deal after many – including Expedia-owned TripAdvisor CEO Steve Kaufer – sat quietly on the fence.
Perhaps his comments will trigger others to follow suit (especially in the light of how some believe OTAs as well as metasearch engines are watching developments closely, and nervously).
I guess what goes around comes around.
diller is quoted as saying “Diller said that Google was using its market power to gain an unfair advantage”.
I think it would be fair to say, that many have accused Expedia of the same thing, with their hotel rate negotiations.
the way i look at it, is that incumbent travel players will need to be more innovative add more value to stay as relevant.
as brands have become mainstream in online travel, generic search terms have started to reduce, so its a natural “bell curve” like progression for google.
(not any more unfair than traditional travel agents complaining about expedia back in the day)