6 years ago

The $700M question: How will Google take travel search global?

Almost 12 months to the day, Google finally announced what many had been anticipating for years: the search giant was getting into travel in a major way.

For all the proclamations in the years beforehand (hands up who heard an executive claim that the company had no designs on entering the travel industry?), Google decided it would pay $700 million to get its hands on the well-respected air shopping and pricing engine ITA Software.

Nine months later, with a Department of Justice review giving the deal the thumbs-up (with conditions), Google has officially been able to spend the past few months working out what it is going to do with its prized asset.

There have been plenty of ideas from outside the Googleplex, some even taking such possibilities to a tongue-in-cheek extreme, while a number of companies formed the FairSearch coalition to try and educate the industry and regulators on how the acquisition might impact on the marketplace.

Nevertheless, Google’s comments following the DoJ review followed its original premise for buying ITA: to develop “exciting new flight search tools for all our users”.

Details of exactly how it intends to do this for ALL of its users are still yet to be announced, but some signs are beginning to emerge, at least on perhaps some of the kind of tools that might be included with its new and wider focus on travel.

OAG and Innovata are currently powering a flight route information test with Google, for example, but the core proposition of how it handles flight search is unclear.

So perhaps now is the time to take a reality check.

The acquisition of ITA did not give Google the final piece in its jigsaw to launch a comprehensive travel search product – far from it, in fact, especially if it wants to create something which works for its international users or for users in North America wanting international flights.

globe flight search

Until now (and every media outlet has been guilty of this), much of the focus surrounding the deal has been on its core market – but presuming the acquisition was a fait accompli of sorts for the entire strategy. It has been a typically US-centric point-of-view.

But the bigger, global picture is actually far more interesting and extremely complicated, especially as it seems unfathomable that Google would only concentrate on the US market.

ITA, through its famed QPX system, provides air search and shopping tools to predominantly US-based metasearch engines and many others, including Kayak, Orbitz, Bing Travel and TripAdvisor for its flight channel.

Sites such as Kayak, for example, use a mixture of QPX and the Metapricer engine from Amadeus (as well as direct feeds from airlines and and online travel agencies) to provide accurate search results to users.

In short: multiple suppliers of data, not just ITA.

Therefore, it could be reasonably safe to presume that Google will be forced to do the same – that QPX would be the primary, but one of a number of technology solutions, especially as ITA is at least considered by many a superb engine for North American coverage but perhaps less so for the rest of the world.

It is at this point in the evolution of Google’s entry into the travel space that the strategy gets extremely interesting.

Put simply: how does Google achieve its ambition of providing “exciting new flight search tools for all our users” – with an emphasis on the “all”, by geography and route requirements?

Here are some of the options:

1) Scale-up ITA

Google could be willing to simply pour resources into ensuring ITA is a truly global flight pricing and shopping engine, so it does not need to rely on others to provide additional data in the same way that Kayak does.

How far ITA/QPX is from being able to do this is unknown, indeed it might be there already. But if so, why do existing ITA customers use multiple suppliers? The perception in the industry is that QPX is currently unable to achieve full global coverage in its current form.

2) Partner with another metasearch engine

Outside of North America, Google could licence the technology of a number of metasearch engines, especially if such providers have widespread coverage and direct connections into airlines.

Whether an existing metasearch engine would be willing to do so is another matter, especially as Google will effectively be a competitor. But it is worth remembering that most metasearch engines forever talk about how they can work alongside Google in the battle for consumers, so if the price is right then perhaps such a possibility is so far-fetched.

Google could, of course, simply buy a company for its technology as well.

3) Partner with a global distribution system or emerging search companies

The infamous Online Travel Ecosystem diagram produced when Google bought ITA in 2010 illustrated that there are plenty of other providers carrying out similar functionality to ITA’s QPX, including all three GDSs.

It would be quite a leap for Sabre (with its ATSE system) to even consider – or be considered – given that it was one of the coalition partners within FairSearch. However, Travelport was always silent, while Amadeus only ever gave extremely lukewarm support to the FairSearch group.

It is understood that some very early discussions have taken place between Google and at least one of the GDSs over the course of the past six months, but there is no official RFP on the table.

Other players in the ecosystem chart included the startups trying to knock on the door of air distribution, Everbread and Vayant.


Google was always going to do something in travel, this much the industry now understands. The benefits both commercially and from a consumer search experience perspective are obvious.

The search giant is deadly serious about entering this space. But the finer details of exactly how Google achieves this are far trickier than just spending $700 million on a travel technology company.

Airfare shopping and pricing is an extremely difficult business – there are too many moving parts, systems, contracts, protocols, geographic differences, for it be easy.

And, lest the industry forgets, this is all before even considering how Google might tackle hotels (it’s started to play here) or tours and activities (it’s already bought in the expertise).

The global proposition for a travel product from Google is the next crucial chapter in the story. And, once again, it will be far from simple.

NB: ITA Software and Google declined to participate during the course of producing this article.

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.



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  8. Timothy O'Neil-Dunne

    We have all had a fair amount of fun at Google’s expense on what they may or may not do. Now is perhaps the time to start considering the core problem. Is there ever going to be a fair and reliable search system for air fare products?

    In this debate there is a world of difference between CAN and WILL, also between COULD and WOULD.

    There are 2 fundamental issues that make up the elephant in the room.

    1. Real time accurate global search for available air products is not possible.
    2. The airlines do not want Google to have access to real time availability ubiquitously.

    To understand these 2 points requires more than just ITA – a fact that might just be dawning on Google now. Did they buy a “pig in a poke”? Kevin’s points (above) from an observed position are factual from an agreement (behind the scenes) perspective.

    These 2 points also expose that the entire air travel system is creaking under pressure and probably will break very soon. Indeed in many places it is already broken.

    Time for a radical re-think about how airline products are constructed and delivered. This rethink should at the very least take into consideration that delegating price construction to multiple players is a fundamentally flawed concept. That today pricing authority is delegated to a small number of gatekeepers is no longer appropriate in an always on web based world.

    The consumer has lost (or more accurately has little) trust in the major brands because there is no ultimate trustworthy source of pricing other than the airline who owns the public and private pricing.

    Once there is recognition of this problem, then perhaps we can set about solving it.


  9. Dan G.


    good article. Re: China – Microsoft Bing + Baidu announced a partnership on Monday.


    • Kevin May

      Kevin May

      @dan – thx.

      Should be expect something similar, perhaps on the Travelsky front then with China?

  10. Michael

    $700m might be a high price that Google needs to justify but Google will not risk losing the adwords business from the travel industry (~$500m per year?) so I am sure it will be a very unobtrusive solution.

    • Kevin May

      Kevin May

      @micheal – define unobtrusive?

      • Michael

        It will look like the schedule search right now just with prices added when dates are entered. On the result page, Google will upsell these highly qualified searches at 1.5x – 2x adwords price to the meta engines/otas.

        The info from ITA will mainly be used for searches with boundaries like “for 2 adults, 1 kid, 1 baby under $1,000” searches.

        Also, Google has made most of its products into (brilliant) APIs so I am seeing a premium “Google Flights” API coming that might disrupt the current business models. More startups will then enter this sector at very low prices and will create fantastic products and thus higher Adwords revenue for Google in a competition fueled enviroment.

        Google hates providing B2C support so they will never introduce an Ota like product.

        • Kevin May

          Kevin May

          @michael – yes, lots of confusion in the mainstream media when the deal was announced that Google would become an OTA. Would throw Google’s business model on its head to do so – not least from a customer service/insurance/etc perspective.

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  12. Jonathan Alford

    Perhaps TravelSky may be watching these developments and want to get into the search/metasearch action more as well. How about Google-ITA-Travelsky now that Baidu has aligned with Qunar? Talk about politics and guanxi…

    • Kevin May

      Kevin May

      @jonathan – the last 12 months have all been about politics 😉

      • Kevin May

        Kevin May

        @jonathan – some would argue that it’s all about the consumer, of course!

  13. Jonathan Alford

    great article, Kevin. Will be really interesting to see if there’s a China partnership play in the works both after the challenging experience Google has already had there and after the recent developments with TenCent/Expedia/eLong and Baidu/Qunar.

    • Kevin May

      Kevin May

      @jonathan – yes, agree. So much of the Google-ITA story so far has been focused on what will they do, rather than how they will do it.

      The latter is kinda interesting, especially for consumers, but it is the latter that is more important from an industry perspective.

      Throw geography into the mix and it gets super-complicated because, arguably, no single provider does the entire job on its own. Or, at least doesn’t yet.

      The China element just makes it even more complex.


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