Google’s purchase of a leading travel software company last week has competitors worried and antitrust regulators on alert.
At stake, says the International Business Times, is “the $80 billion market for online travel services, $44.8 billion of which flows from airfares. By 2014, this market is predicted to reach $111 billion, with the fares segment increasing to $59 billion.”
The search giant says it will use the addition of ITA Software to
work on creating new flight search tools that will make it easier for you to search for flights, compare flight options and prices and get you quickly to a site where you can buy your ticket.
One of Google’s top search rivals, Microsoft’s Bing, has a dedicated travel site, while Google does not.
That seems certain to change, if antitrust regulators approve the ITA deal.
Two leading travel search sites, Kayak and Expedia, were so worried about Google’s entry into the market that they sought to buy ITA to keep it out of Google’s hands, according to Reuters. ITA apparently didn’t even entertain their offer while concluding the deal with Google.
Travelers may benefit from Google’s expertise but it’s hard to see how they would benefit from less competition in the travel search area. And that, says the Wall Street Journal’s Digits blog, may be one result.
In the long run, though, online travel agencies could face a problem — not just from Google but from other meta-search engines like Bing. The entry of the Google juggernaut might just accelerate the trends. These meta-search engines do provide online travel agencies with more leads, but they increasingly direct consumers to airline and hotel sites instead, and this could eventually cut into margins for the travel agencies.
“Clearly Microsoft’s Bing would be discomforted by having to buy their flight data from their biggest competitor,” said Hadley Reynolds, an industry analyst who spoke to EWeek.
“Kayak, the people’s choice flight aggregator, could face a lights out event, similar to Microsoft’s strangling of Netscape in the ’90s. Even Expedia and Orbitz could be badly damaged if Google chose to build flight bookings into their search. Look for all these parties to oppose this Google move energetically.”
“This is another example of Google tying new kinds of services to the virtual monopoly it already exercises in Web search,” Reynolds added. “Should this acquisition move forward, this administration can be expected to bring it under intense scrutiny immediately.”