Travel Search: Are Google and Microsoft Confused?
March 8, 2011
I read “Ex-Microsoft Employee: 5 Things The Kayak Deal Tells Us About Bing” and took a moment to think about travel search. My personal view of travel search is that it is not very good. Services that promise discount travel play more tricks than a mid tier consulting firm reporting an objective, independent study of search systems. One example is the magic of taxes and fees. Another is the time out trick. Wait too long to click and the search goes dead. Rerunning the search yields a flight listing with the trip one was thinking about gone missing from the list. Clever? Yes, clever indeed.
I think the background for thinking about travel is Google’s effort to acquire a big travel aggregator. That deal is making headlines with its effort to buy ITA Software. You can read Google’s statement at “Facts about Google’s Acquisitions of ITA Software” and then check out the pros and cons on many, many Web posts. I have ignored this type of deal because airlines are starting to play hard ball with aggregators and middle people. Airlines are finally starting to figure out that if they emulate Southwest, they can make some extra money. Now airlines and giant outfits like Google are going to be engaging in a love-hate relationship. Apple has already figured out that its monopoly position allows it, not the content providers, to make the rules.
Nevertheless, I spent a few minutes pondering the Microsoft Kayak deal. Here’s a key snippet from that write up:
Forget vertical. It’s more fun being horizontal. A few years ago, Microsoft thought that they could compete with Google by chipping away one vertical at a time. For example, they bought Farecast to do travel, they did the awful cash back promotion to chip away on shopping search, and then they made a lot of noise in the marketplace about how their maps and pictures were delivering better results then Google. Now it looks like Microsoft is going to focus again on general search.
In my opinion, this passage makes clear that Microsoft is flip flopping and reacting to a number of real and perceived threats. Nothing new, of course. But the statement “Microsoft is going to focus again on general search” caught my attention. Here’s why:
First, I think few people realize that the depth of the Microsoft and Google indexes are not well understood. The action is in the information that gets clicks. This means that when one looks for health care testimony before the US Congress, there will be less information than information about Lady Gaga’s meat dress. The perception that the indexes are deep, wide, and current is one thing. The reality is quite another. The big search services are now little more than collections of vertical content.
Second, the notion that travel search is going to remain objective is off base as well. Airlines will pay to get traffic. Airlines will then try to exclude any other outfit in the food chain from getting a piece of the action. So finding and buying tickets is going to remain a cat and mouse game for quite a while. Who will lose? Probably the ticket buyer like me.
Third, individual brands like Kayak get traction and then get sucked into the maw of a larger outfit. Then the brand magnetism dissipates and whatever benefits were perceived at the time of the deal. Two things happen. Entrepreneurs move into the same space and the acquired outfit begins to decline in potency. You may disagree, but I am comfortable with my generalization. Hey, it happened to our Point (Top 5% of the Internet) and it has happened to other outfits as well. Anyone remember Dodgeball?
Now why confusion?
The companies are taking a tactical approach to this market. One hypothetical strategic view is that Microsoft and Google may have to buy airline companies to get control of ticket sales. Without direct ownership of search, some of the other types of deals are going to be subject to tectonic pressures that will shatter the tie ups. Short of becoming airlines, the air ticket segment of travel will remain a geologically active area for a while. A collection of tactics may yield a victory, but I think tactics will keep the sector unstable which is typical of today’s business machinations in my view.
Stephen E Arnold, March 8, 2011
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[…] Travel Search: Are Google and Microsoft Confused? Beyond Search: I think the background for thinking about travel is Google’s effort to acquire a big travel aggregator. That deal is making headlines with its effort to buy ITA Software. […]