But despite the mountains of speculation in the media and gossip kicking around in various back-channels during June of that year, Google agrees to buy ITA Software for $700 million in cash was still enough of a headline on 1 July to send immediate reverberations into almost every corner of the industry.
[The simple story announcing the deal remains one of the most popular and most commented of all time on Tnooz]
With the price now disclosed (at the time, one of Google’s largest acquisitions to date), a promise of honouring existing ITA contracts but an¬†inevitable requirement for regulatory approval, industry watchers went into overdrive as to the likely impact of what many believed to be one of the landmark deals in travel’s recent history.
Even at this stage Google was vague as to EXACTLY what it would do with its new baby, but some kind of move into air fare search using the famed QPX system created by the brainiacs at ITA was the most obvious outcome.
Whether this would be an advantage to airlines or online travel agencies was hotly debated – although Google’s typical response was that the acquisition would benefit users, trying to avoid any early ructions with its new fellow members of the travel industry.
Within days, however, signs were emerging of the pressure Google was under to ensure it not only kept its curious/worried partners and rivals happy but that, more importantly, its entry into the sector should be given the thumbs-up by the US authorities.
When the acquisition was announced, Google produced a chart outlining what it considered to be the travel ecosystem, illustrating that it would have plenty of competitors in travel search and regulators shouldn’t be worried that it would take a dominant position.
That same chart was quietly updated¬†a few days later with the addition of Vayant, another European company similar to Everbread (lots of history between those two)¬†offering airfare shopping. Lots options, lots of both big and small players, everyone can be happy, seemed to be the message Google was trying to put out.
But as the weeks turned into months and the Department of Justice in the US¬†kicked off its review of the deal, there was no let up in the speculation as to how important the deal would be to Google, airlines, metasearch engines, the OTAs and, of course, consumers.
Founding members were¬†Expedia¬†(with sister brands TripAdvisor and Hotwire),¬†Kayak,¬†Sabre Holdings¬†and¬†Farelogix, with Google’s arch enemy in the wider world of the web, Microsoft, widely rumoured to be one of the driving forces behind the move. It joined officially a month later.
Google was obviously restricted from doing anything ahead of the DoJ decision, but this didn’t stop it from trying various things to change how air queries were displayed in search results, using other technology such as OAG‘s flight schedule data rather than anything from ITA.
Inevitably as attention continued to focus on how Google would eventually might use ITA to ramp up it efforts in air search, it was in another sector of the industry that the search giant was also plotting to enter – hotels.
Although Google Hotel Finder didn’t get its official first airing until July 2011, many believe the service was being developed by engineers during the down-time while officials waited for the DoJ decision to come through.
Back in the world of air search, Google finally got the approval it desperately wanted from the DoJ on April 8 2011, with just a smattering of the conditions¬†the anti-Googlers were seeking.
Increasingly impatient eyes now turned to what form the first iteration of Google’s strategic foray in air search would actually take – a wait of only four months after the deal was closed as¬†Google Flight Search eventually appeared in September 2011.
Although some were underwhelmed by its launch, most (even the grumpiest of naysayers) were impressed by the apparent speed with which search results were returned to users.
But the big talking point was the exclusion of online travel agencies in the display – a move it explained away as honouring the historical “control of pricing data and distribution” by airlines. Google promised to explore “advertising opportunities within the page to showcase the products and services from other relevant partners, including OTA and metasearch partners”.
Some agency links were eventually in March this year, alongside other enhancements and the addition of other US cities.
A month into its launch, Google Flight Search stood at 391 in the list of most popular travel sites in the US (based on share of web traffic), a lowly figure compared to Kayak in 17th spot.
Another five months on and its position had increased to 368.
So would it be safe to say that, two years to the day since Google bought ITA, the flight strategy at Google has not worked out as planned?
Unfortunately (and disappointingly), Google declined an offer to contribute to this article when asked to summarise from its own perspective how the two years since the acquisition was announced had worked out so far, so any sense of achievement (or otherwise) is difficult to determine.
The product is obviously evolving all the time, and still the speed of results is to many the most impressive aspect of the service, but it is unclear as to whether this is in line with strategic expectations and the product road-map of the company.
What remains, therefore, are the challenges that Google still has in front of it.
Despite¬†former-CEO of ITA and now vice president for travel at ITA Software by Google,¬†Jeremy Wertheimer, claiming in November last year that an international roll-out of GFS was “coming soon”, launches in other key markets have not materialised as yet,¬†despite a few international routes being added in March 2012.
Yes, ITA has expanded into the airline system hosting game with the launch of a partnership with Cape Air, but arguably the flight search service has not had the impact which many feared.
Anyone that considers the current iteration of GFS to be the final product is clearly deluded, but equally questions remain as to how Google scales the product internationally¬†(it clearly did not spend $700 million to get into the flight search business just to serve US users).
And what will be the secret sauce which is added to the product to make it REALLY resonate with millions of users (and keep them coming back), in the same way that Google did to make products such as Gmail a success?
While the answers to these questions remain under wraps, the industry plods on regardless.
The FairSearch group continues to point to and snark about its arch nemesis, recently taking its battle to Europe¬†as companies lobby regulators at the European Commission¬†about the dominance of Google in general search issues.
This is a position supported in principle by the¬†European Travel and Technology Services Association¬†(ETTSA), representing the GDSs and a string of online travel agencies.
The importance of travel search being a truly global product for users (at least in terms of the quality of results and breadth of carriers) is also back in the limelight, with ETTSA member and Spain-based¬†Amadeus trying to make some headway in recent weeks.
Perhaps one the most important signals here was the recent announcement that Kayak (arguably one of the most passionate members of the FairSearch group) would be expanding its relationship with Amadeus to not only bolster the metasearch engine’s international ambitions but also get assistance with airfare shopping in North America.
This, ironically, is at the expense of ITA, which has worked with Kayak for years but is now seeing its technology being used for search queries far less than it had previously.
Silicon Valley hipsters Hipmunk¬†also signed a deal with Amadeus for international metasearch, rather than wait for its domestic provider ITA¬†to scale up.
It is unlikely that Google thought entering the travel industry would be easy, but equally the speed with the sector evolves means that already much has changed in the two years since it splashed out $700 million on ITA.
One online travel agency boss, who was very much in favour of having Google officially come into travel (“stop moaning about it and just get on with running your business”, he once muttered privately), now ponders whether the inherent difficulties of bringing a comprehensive flight search service to the masses are being played out publicly by an apparent lack of progress.
Or, perhaps uncharacteristically, Google is just biding its time and the industry will eventually be forced to take notice when something truly jaw-dropping materialises, or the scale issues are resolved.
Amazingly, and no doubt much to the disappointment of the Fairsearchers of the world, there are many inside the industry who REALLY want the jaw dropping product and expansion to actually happen.
Some argue that the travel industry needs constant disruption.