30 October 2010

These rumours about Google/Opodo are great fun.

Unlikely but fun.

Its the weekend - pretty much wherever you are - so how about a nice rambling discourse on Opodo.

I remember back a couple of years when writing about Google getting into travel was constantly denied by Google. Remember we used to go on about Troogle? Then we heard (on reasonable reporting) that Google were looking to buy Farecast (prior to Microsoft buying them and incorporating that service into Bing). Ok that never happened but now we have Google / ITA. Big, and clearly attracting a lot of interest, angst and unwanted attention.

But something has been bugging me about these deals for a while. Look Farecast isn't ITA. While both on the surface may look like they give great flight data they both come from different sides of the equation. Farecast were always on the side of the consumer - they said don't buy now, buy later (upsetting airlines in the process). ITA, while not exactly the darling of the wider travel industry, seem much more on the industry side than, say, TripAdvisor (who appear to pretty much help consumers exclusively). For example see just how many airlines and meta-search sites are powered by ITA software.

So whatever Google are doing it seems they are focused on "helping" the industry. This is understandable - they could deliver a mediocre consumer proposition (the competitors are good, but don't own travel consumer traffic so are disadvantaged). A mediocre consumer proposition owning "free" travel focused web traffic would deliver a great revenue. No need for doing something exceptional or game changing. Perhaps then some of the pundits who say that Google wont need to bring innovation to the Travel process may be onto something.

As we have seen from large scale players such as Apple and it's iPhone business model - the real darlings of the stock market are those with multiple bites of the revenue stream. Let's look at Google and travel then.

On the media model the players/customers Google would really care about are the companies buying the adverts. On the transactional model (e.g. buying Opodo) they do need to care about consumers quite a lot more. This is something that is unlikely because its an operational business. However it's the consumers would deliver the revenue.

Of course in reality consumers have the money and wear the trousers. Long term, if Google slightly would - naturally - be expected to favour the trade (whatever they say this would happen in my opinion because Googlepus has to "game" the sellers of travel to optimize its revenue) then this leaves a tiny crack for a new entrant to take the pure consumer perspective. Maybe this could be Bing, with their consumer friendly Farecast heritage, could be that company. But that would result in another clash of titanic elephants. Not known for being swift on their feet.

Enough of this talk about elephants. Instead let's consider what would happen if the mega pachyderm Googleplex took the same approach to the travel sector as for example they have taken to other areas they have recently acquired. Instead of these multi-gazillion dollar transactions howabout building a new industry from ten plus startups who either take the consumer perspective or are part of the supply jigsaw. We know Google are running "invite only" events for some of these these travel startups so Big Brother is aware who they are (although I am personally slightly miffed that my invitation went missing the post, apparently!)

The question stands. Either Google go 100% taking the consumer perspective (aggressively helping consumers at the cost of their supplier relationships) or they go the media model, trade helping, route. The nuances of doing both are too tricky for a non-travel specialist.

If Google don't go the consumer backing route then this leaves a hole. It might be a tiny hole but it will be one that as I noted above Bing, with their Farecast system (very consumer oriented) plus many startups can attack them on. Taking this point of view, actually buying Opopo (revenue generated by consumers) may not be quite such a mad idea after all.

OK - confused? Don't be... Google isn't going to buy Opodo. That is just wishful thinking by Amadeus. (or a PR agency trying to build some value for the purchase of Opodo which is such a dead duck).

But stranger things have happened.

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