Google Seals the Deal With ITA

2nd Jul 2010
Google Seals the Deal With ITA

Media outlets around the world are abuzz with the news of Google’s ITA Software acquisition. On the July 1 announcement call, Google’s Eric Schmidt and Marissa Mayer were understandably vague about what changes would be made to the Google search experience as a result of the acquisition. They did express, however, that the degree of sophistication they seek to build into search requires a deep level of integration—more than what just a software license could provide. They stated that metasearch as we know it today is not where they are planning to go with the integration. In other words, do not expect another Kayak look-alike—they claim to be building something that the industry has never seen before.

While Google claims not to be building a new metasearch tool, comprehensive price aggregation across sites is inevitable. To not introduce it would be a pretty big waste of US$700 million. For metasearch companies, surviving the upcoming era of disruption requires them to build true consumer brands—something beyond a collection of features, functions, widgets and gadgets. And they had better do it fast. Even if Google does not deliver something all that new, millions of consumers will be exposed to real time fare results without necessarily doing anything different from what they do today. They may even be searching for a hotel, and soon discover fare results along with their hotel results. If the integration does not require people to change their behavior, remember a new site, or even be cognizant that they are initiating a real time fare search, you can imagine how quickly usage will spread.

Speculation and even paranoia abound as travel companies grapple with the implications of the convergence. At the face of it, there is little to be so worked up about as the fundamental online distribution landscape and the ongoing tug-of-war between airlines and OTAs will continue unabated—the move does not signal a play for ticket transactions. But, it does show a serious commitment to making the Google search experience fundamentally better for air travelers—which today is clearly lacking. Ultimately, the more relevant search becomes (and the more reliant consumers become on it) the more power Google will have over advertisers. What online travel retailer looks forward to that?

While the acquisition may come off as Google getting ever-more greedy for power in the travel space, research from PhoCusWright’s Consumer Travel Report Second Edition  shows it might actually need this enhancement to stay relevant to travelers. Consumers who usually or exclusively book online are significantly less likely to use search engines while shopping for travel—they go straight to the brands they already know. And because search’s influence is most powerful early in the travel planning cycle, they must surface the most relevant, powerful information up front, because once consumers move down the funnel, their interaction with search falls off.

We could try to label what Google plans to launch as metasearch—but really, it is just better search. Google does not need a travel-specific consumer brand or product to surface what it knows people are looking for. But would brands like Kayak still want to work with ITA now that it is owned by their gargantuan competitor? Does not seem likely, but there are not many great alternatives yet, so coopetition may be the route they choose. Is the Google-ITA merger the harbinger of death for metasearch? Not necessarily. There is still a lot for meta to do—the hotel space in particular offers plenty of opportunity and ITA does not give Google any immediate advantage in the fragmented world of lodging. But the acquisition will be a catalyst for meta brands to mature beyond what has brought them to where they are now. Bid farewell to meta as we know it.



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