Panic for most, joy for a few as rumour of Google-ITA Software deal intensifies
A number of senior figures in the metasearch arena, for example, have said privately that they heard a deal was in the offing. But rumours fly around the travel sector every day, especially ones involving Google.
Up until now, ITA and Google have dismissed any such suggestions.
Nevertheless, the Bloomberg wire service has published a report suggesting that a $1 billion – yes, $1 billion – deal is on the table, based on three sources.
A Google official says this morning:
“While we’re always talking to various companies about a variety of things, we don’t comment on rumour or speculation.”
The price may surprise and be a big talking point to those outside the travel sector, but for those within it will be just a marker during the wider analysis of what a deal such as this really means.
The irony of such a deal comes in many forms – firstly that ITA powers the Bing Travel metasearch system (Farecast) and also because other ITA customers such as Kayak would effectively be paying the Big G twice, through advertising and use of technology.
But the serious elements to note are as follows:
- What would be Google’s motivation for buying ITA?
In short, it would get its hands on the technology that handles airline data for metasearch engines (Kayak, Farecompare) as well as online travel agencies such as Orbitz. ITA also works with a string of airlines including Continental and United. What Google would do with the data (if anything) is a mystery at this stage, but dynamic pricing against search results seems the most obvious answer.
Google UK managing director Matt Brittin said yesterday – answering the inevitable Troogle question at the Travolution Summit in London – that Google had no intention of being a “travel agent or tour operator”.
The search engine is always experimenting and it will add more information to improve the user experience and search results, he added.[Some might question whether dynamic pricing against travel products is just “more information” – to many it’s known as metasearch]
- How will a deal impact other areas of the marketplace?
Some suggest metasearch appears to be an obvious loser. If Google is providing the same dynamic pricing on various travel products in search results of maps, why use a metasearch engine (just brand?)?
But, of course, the same could be said for online travel agencies.
Airlines may also find themselves in an awkward negotiating position given that Google would become not only one of the biggest sources of traffic but also have its strong position as the primary advertising space on the web (certainly in many markets).
Tnooz node Alex Bainbridge suggests that a benefactor of such a move might be small tour operators (his company handles software for such firms).
“Google is very good at sending traffic direct to small tour operator (supplier) websites. Yet many small tour operators don’t have the capability (or desire) to sell flights. Hence the combination of a Google flight search plus consumers being directed to specialist tour operators is better (for consumers and specialist tour operators).
“The alternative is consumers buying on OTA websites and getting little exposure to the interesting in-destination activities and tours that can be purchsed, except those featured on the OTA websites – and these tend to be dull, commoditised, city tour style tours.”
But, overall, very few beneficiaries.
- Where will it leave other tech providers?
Some say a company such as Everbread, which has seemingly been on the scene for just a matter of weeks, may find themselves suddenly thrust into the limelight as a result of such a deal, given that they are positioning themselves as a (cheaper) rival to ITA.
But at this stage the rumour-mill is simply heading into overdrive, inevitably.
One UK-based travel boss says the spectre of such a deal has been looming for months, even years, while another suggests it is simply Google moving toward Troogle.
“They have picked, in my opinion, the best middleware tech provider, and this may be Google getting one step closer to search relevance.”
Kevin May is a senior editor and one of the co-founders at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.
He has worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and will be publishing his first book - a biography about electronic band, Depeche Mode - soon.