• http://www.techwang.com Dan Rogers

    Greg:

    “It’s quite unlikely, however, that a Google Travel site or enhanced search capability would actually impact airline prices. It could over time make travel advertising and keywords on Google more expensive for airlines and others if Google were able to consolidate consumer travel search. But that’s not a concern about airline or travel pricing itself.”

    Umm… where is the money to pay for the more expensive advertising going to come from? The Tooth Fairy? No, it will come from the airlines pockets which will ultimately translate into higher consumer prices or lower business margins.

    This is not a good deal for the industry. If Google just wants access to the data to build a travel vertical, then nothing is stopping it just getting the data from ITA. Buying ITA is a monopolistic and unnecessary move with nefarious intent on Google’s part.

  • http://screenwerk.com Greg Sterling

    The question about airline prices is near term vs. long term. Yes, I agree that longer term there could be negative consequences in several respects. But I don’t think you’re going to see fare increases if Google is allowed to purchase ITA as any kind of immediate consequence.

    TV and newspaper ads typically cost more than keywords. That’s where lots of travel advertising now happens. And how much do you really click on ads when you do a travel search? It’s really about organic content and OTAs/travel destinations.

    The biggest “danger” to consumers is that other travel sites shrivel and die and they have fewer choices about where to look for travel information.

  • http://www.techwang.com Dan Rogers

    Hey Greg,

    “The biggest “danger” to consumers is that other travel sites shrivel and die and they have fewer choices about where to look for travel information.”

    I’m still not convinced. If Google controls the distribution (which it will do if the other travel sites die) then it will be able to squeeze extra profits out of the industry (which incidentally is the whole point of monopolising a vertical).

    Another way to frame this situation is to ask – what incentive does Google have in owning ITA other than putting the squeeze on other players? I can’t think of one….

    Cheers,

    Dan

  • anonymous54481

    Come on now Greg… This has nothing to do with Travel. Or at a minimum, little to do with travel. That’s like gravy on a multi-billion dollar opportunity.

    Google is about to get a screamin deal and ITA stakeholders should be kicking themselves for the paltry $700M deal. Especially after seeing that G was willing to pay $6B for Groupon…when ITA has something much more valuable to G.

    ITA systems are the choke funnel for amazing data. Imagine the advertising system you could build if you knew:

    - Everyone coming into a given airport on any given day. Arrival time. Departure time. Origin. Destination. Food allergies. Maybe even affinity program numbers (elite status, etc).
    - That the group traveling is a single person or family of 3, 4, etc
    - Add a little bit of magic to tie together mobile phone (the first thing people turn on when arriving) and you know even more. Tie that mobile phone ID (Google login) to desktop search and even more.

    Indoor digital displays with personalized advertising (Minority Report!), mobile advertising, coupons, intent, etc, all possible. And because you own ITA, a Google company, you just throw it under the same Google terms of service.

    Oh and if the airlines complain once they see what’s happening, throw them a bone because they’re broke. Oh, maybe they already know. And that’s why they aren’t in the groups fighting this.