priceline
1655 days ago
 

Priceline — no fear and loathing about Google-ITA Software

pricelineWhere others see potential calamity in a possible Google acquisition of ITA Software, Jeffery Boyd of Priceline sees “opportunity.”

Answering questions at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston yesterday, the Priceline president and CEO said if Google buys ITA Software and leverages the technology to deliver better-qualified customers to Priceline and other online travel agencies, then Google’s foray into vertical, travel search would represent an opportunity for Priceline.

Boyd said Priceline would be willing to pay more to Google for such better-qualified leads.

He added that all of this is “speculation about speculation.”

Boyd’s view stands in stark contrast to much travel industry conversation of late about a possible Google-ITA Software combo. Many suppliers and intermediaries have expressed fear that if Google buys ITA — a development that’s been the subject of rumors for weeks — then Google would take market share and be able jack up search-engine marketing costs.

And, travel metasearch companies — many of which use ITA for air search — worry that a core piece of their technology solutions would come under Google control.

Priceline finds itself in a different position because it doesn’t offer its own metasearch product and, unlike Orbitz, it doesn’t use ITA Software for air search.

However, Boyd’s brief comments about  the potential opportunity for Priceline if Google develops vertical travel search with ITA Software, appears to be a bit more bullish than the risk factors the company cited in its first quarter 2010 10-Q filing with the Securities and Exchange Commission.

Here’s an excerpt from Priceline’s most recent 10-Q.

“Large, established Internet search engines with substantial resources and expertise in developing online commerce and facilitating Internet traffic are creating — and intend to further create — inroads into online travel, both in the U.S. and internationally,” Priceline states.  ”For example, Google is actively testing a travel “meta-search” site to show searchers specific hotels and rates in addition to text advertisements, which began beta-testing in the first quarter of 2010, and Microsoft recently launched Bing Travel, a “meta-search” site, which searches for airfare and hotel reservations online and predicts the best time to purchase them.

“Meta-search sites leverage their search technology to aggregate travel search results for the searcher’s specific itinerary across supplier, travel agent and other websites and, in many instances, compete directly with us for customers.  These initiatives, among others, illustrate Google’s and Bing’s clear intention to more directly appeal to travel consumers by showing consumers more detailed travel results, including specific information for travelers’ own itineraries, which could lead to suppliers or others gaining a larger share of Google’s or Bing’s traffic or may ultimately lead to search engines maintaining transactions within their own websites.

“If Google, as the single largest search engine in the world, or Bing, or other leading search engines refer significant traffic to these or other travel services that they develop in the future, it could result in, among other things, more competition from supplier websites and higher customer acquisition costs for third-party sites such as ours and could have a material adverse effect on our business, [my ital] results of operations and financial condition.”

Of course, risk factors are meant to pose worst-case scenarios.

In other news, Boyd said that although Priceline has been less aggressive than its peers in developing an advertising model, it’s possible the company would eye advertising-oriented businesses in the future as it ponders mergers and acquisitions.

Also, Boyd noted that Priceline had to relocate an office in Thailand because of the ongoing unrest.

 
 
Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.

 

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