30 July 2010

Will They Or Wont They: Google and Travel Transactions

The debate over whether or not Google gets into the Travel Transaction business seems to haunt a lot of people. In my view - the issue is moot.

At the official news conference for the ITA acquisition, Chairman Eric Schmidt REFUSED to be deny that Google will not be in the Transaction business. The Charm offensive (that seems to be failing) studiously has the Google Acolytes saying no we are not going to get into the transaction business.

When I was at Expedia and we started our own charm offensive with the rest of the World - we (as then Microsoft) could not avoid the issue. But we downplayed the threat to the traditional agents. Internally of course we saw that the traditional agency channel was not that smart and therefore we could grab market share easily. That has been proven with the demise of the smaller agent and the rise of the OTA mega intermediary. The distribution pyramid looks dramatically different today than in 1996.

So my point about the issue being moot - is that Google doesn't have to be in the Transaction business. AT LEAST not in the conventional sense. I do agree that Google wont be manning call centers any time soon. But processing squillions of transactions in their cloud. Well don't say I didn't warn you.


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