This may be the answer you get when you call the travel agent that helped you book your flights and find a budget hotel in Reykjavik. Is that possible? Well, wait for a while.
In a presentation of Bing’s virtues, the search engine by Microsoft, Mark Johnson, a senior Program Manager at Bing described the concept of search verticals, that is, specialized search engines that using semantic rules and context information provide users with a much better search experience than generic search engines, Google in particular. The point of Bing, was that there is a lot more to search than Web pages. When you are looking for a cheap hotel in Reykjavik, you do not only want a list of pages, but a comparison of the prices of the different alternatives, the average price of the city, and hopefully, an easy and secure way to check availabilities and make a reservation. Something similar occurs with airline tickets. In fact, you would like something else, you would also like to know whether in the next few days prices are likely to increase or decrease for the destination you are interested in. All this is what a good vertical should give you, and in fact, if we are talking about monetizing traffic, the possibility of so doing in verticals, due to the extremely targeted audience, is much higher than in generic web searches.
Bing, with this specialization strategy has been able to reach about 4% of worldwide searches, but its possibilities of monetizing are far greater than its overall market share. If you combine this with the fact that according to Google travel-related advertising is the number one industry in revenue, the stage is set for Google to make a serious approach to travel.
According to a number of reports, the smart search engine behind Bing Travel is not software developed or owned by Microsoft, but by a company created by a number of MIT scientists by the name of ITA. ITA, in fact, is also behind most of the online travel sites that offer airline tickets from multiple companies, like Orbitz and Kayak, and even it is used by some airlines to optimize its yield by changing prices in real time according to the reservations they hold for a given route. It makes sense, then, that if Google wants to enter seriously the travel vertical, it does so by targeting ITA, and this is what it did July 1st by paying $700 million and securing control of the company.
What will this do to the online travel industry? First, we have to wait for regulators to approve the deal, but it does not seem to have many problems as Google has promised to honor the existing contracts (until its clients choose to stay with Google, that is!) And this move in fact can be seen as a way to increase competition, since it brings a new player into the field. Assuming then, that the merge goes through, we should expect Google to offer smart airline searches (they seem to shy away from the use of the word vertical or specialized searches) combined with hotels at destination. The extremely powerful location-based information at its disposal in Earth and Maps, together with StreetView and the wealth of user-generated information, can make Google a formidable travel agency combined with a travel guide, all in one.
If this prediction is true, we will see a great shakeup in the industry, with massive consolidations and the world market concentrating in the hands of a few competitors that can master the power and energy to be contenders with the Google powerhouse. One trump remains in MIcrosoft’s hand though: the Redmond company did not sleep in its laurels and in 2008 bought Farecast, the smart engine that predicts whether the prices of the tickets will go up or down in the next few days, and that is heralded as the reason Bing Travel grew 9% this past year. But knowing what Google engineers can do, I would not bet anything that they do not have a similar engine ready for deployment when Google travel launches.
