Some quick thoughts on Google’s acquisition of ITA

Wow. Things are really getting interesting. I’ve been talking for a while now about the convergence of search & travel, search & local, search & mobile/location based services. This is just another proof point (a $700M proof point). It doesn’t really affect Goby directly – we really haven’t been playing in the airfare space, we decided a long time ago to leave that to people who already do it well. The biggest potential losers in this deal are the metasearch players and online travel agencies – Kayak, Expedia, Travelocity and Orbitz, because Google can now build a user experience for flight search that dis-intermediates those companies and connects users directly to airlines for purchasing.

There’s also an interesting tension with many travel advertisers – Google receives billions of dollars in travel advertising revenue, but increasingly travel companies are viewing Google as competition (through things like Google Places pages and Google City Tours), and might take their ad $ elsewhere. The other interesting potential loser is Microsoft, for two reasons. First, Bing Travel is a great differentiator for Bing, and now Google has said they will build a competitor, where previously they had none. Second, Bing Travel (an enhanced and re-branded version of Farecast), was powered by ITA – it will be interesting to see how long that lasts!

Interesting times indeed. As airfares become more and more of a pure commodity, at Goby we’re thinking the action in the industry will turn to finding experiences – the real reason people travel. And Goby is perfectly positioned for that.

(btw – in addition to the obvious, Google is a winner in that they get a huge pool of deep engineering talent, and vertical expertise in the travel industry. They also pick up an interesting and not well publicized asset of ITA, the Needle project).

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