Google to control travel industry with ITA acquisition
Google shook up the property industry in February 2009 when it released an update to its Google maps product which enabled people to add a real-estate layer to show properties for sale and rent. The changes were enough for Real Estate portals to threaten to block Google and cut AdWords budgets, but the travel industry didn’t make as much noise last week when Google bought ITA Software.
It’s likely that it was more a mix of shock and disbelief that Google would be able to control the whole vertical for Travel in a single purchase of ITA Software and no-one else thought of it before them.
The importance to the travel industry is that ITA Software is a management system for airfare pricing and comparison shopping used on a number of leading travel websites such as Cheap Flights,Kayak, Orbitz, Hotwire and Bing Travel. Because of the scale of the ITA deal it will also cause concern among a number of travel affiliate websites who might be using Kayak as their booking platform, so in the past you might have visited a site like Las Vegas Flights to purchase your airline tickets you could be buying direct from Google in the future.
The big concern is after Bing bought Farecast for $115 million, it only bought the Farecast technology and not the ITA Software platform that powers the Farecast technology. The Farecast technology allows visitors to Bing to do quick analysis on Airfare & Hotel prices for consumers so they know if they should buy now or wait for the best price on an airfare. The bigger issue is that Bing’s Travel platform is now powered by software owned by search competitor Google.
While Google has said it has no plans to sell airline tickets directly to consumers and will honour ITA agreements it does put companies like Bing and Kayak in an interesting position with their competitor having access to their backend data, including margins, conversion rates, and revenue. This data allows Google engineers a massive insight into the travel sector including how, when and what people are searching for who are not using Google search and potentially alter its algorithm to give it a competitive advantage.
I think this acquisition makes it crystal clear that Google has gotten too big and gotten their grubby paws into too many things. It would be insanity if this deal is allowed to go through. I sincerely hope it fails. In the mean time, I’m glad I use Expedia for all my travel booking.