13 years, 10 months ago

This is Landmark: Google's entry in a vertical industry ecosystem

Link: http://eamitabh.blogspot.com/2010/07/this-is-landmark-googles-entry-in.html


In case you have not heard or read about it yet…please do take a note of this. It is a landmark development. It is an event which marks Google’s entry into an industry vertical ecosystem. On July 1, 2010, Google announced an agreement to acquire ITA Software, a Cambridge, Massachusetts flight information software company, for $700 million. On it’s official page Google says;

* Google’s acquisition of ITA Software will create a new, easier way for users to find better flight information online, which should encourage more users to make their flight purchases online.
* The acquisition will benefit passengers, airlines and online travel agencies by making it easier for users to comparison shop for flights and airfares and by driving more potential customers to airlines’ and online travel agencies’ websites. Google won’t be setting airfare prices and has no plans to sell airline tickets to consumers.
* Because Google doesn’t currently compete against ITA Software, the deal will not change existing market shares. We are very excited about ITA Software’s QPX business, and we’re looking forward to working with current and future customers. Google will honor all existing agreements, and we’re also enthusiastic about adding new partners.

The reality is, this is a disruptive development for the travel technology providers. Disruptive but may be welcome? One may interpret this as power to the people who are looking for bargain travel getaways or even next cheap business flight. The airline travel market is dominated by traditional GDS big boys such as Amadeus and Sabre for decades now. The airlines briefly try to wriggle out of it using web / ecommerce strategies etc. The reality is GDS companies still manage and control the access to inventory in most cases. The airline ecommerce at best is fragmented with limited success to outlets such as expedia, last minute etc.

But Google’s entry is going to change all this. I do not even know how much and exactly to what extent. But rest assured for one thing, if what google has done to search, email, content provisioning, online ad revenue is any indication to go by….this move into an industry vertical is a game changer. Google brings willingness, ability and funds to a market struggling for innovation in true sense. And there is a good chance that big GDS players as well as airlines will be reviewing their online and ecommerce strategies in light of this development.

As for impact on wider online / ecommerce industry beyond Travel vertical…the signs are ominous. This may be an indication that, Google now is no longer interested in playing generic search and email game. But looking for greener pastures in industry verticals. I wonder what next? Looking for next best Mortgage deal using Google financial services vertical?

Watch out this space, it is a landmark development folks!