On Strategy (by Sramana Mitra) recently featured an article describing Google’s recent entry into the “vertical search” space, as they acquired ITA Software: a 14-year old company making software that compiles flight and pricing data. The acquisition was quoted at $700 million in cash and marks Google’s entry into the travel search market.
With the addition of Boston-based ITA, Google’s Marissa Meyer states: “we think there is room for more competition and greater innovation. Google has already come up with new ways to organize hard-to-find information like images, newspaper archives, scholarly papers… Once we’ve completed our acquisition of ITA, we’ll 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.” “We’re confident that by combining ITA’s expertise as the leading developer of flight information software with Google’s technology we’ll be able to create great user innovations in flight search.”
Google will compete in this space with the likes of such search engines as Kayak.com. As the blogger points out, it is about time that Google joins this vertical search space. It can provide its much-needed (in her estimation) innovation and sophisticated search algorithms which these other companies may lack. However, now Kayak is also beefing up its offering as it has purchased lead competitor, SideStep. This combined venture will become the fifth-largest online travel company, with a combined estimated worth of $3.5 billion, revenues totalling $85 million. More consolidation in this market is most likely in the making and inevitable.
However, will Kayak compete once Google gets up and running, full throttle with customers migrating? And will these consolidated companies really make the consumer happier? From my past experience, certain travel sites can be better for certain purchases than others. For example, it used to be that Hotels.com was the best for finding your perfect hotel … (Unless you were willing to be flexible on your arrival date & time and/or quality of hotel, in which case Hotwire or Priceline would almost always find cheaper rooms.) For flights, Expedia or Orbitz may have been one’s preferred choice. This is all left to unfold — What are your thoughts?
(quotes courtesy of: www.sramanamitra.com)
