One of the joys of working in and around the airline business was always the multi-cultural nature of its people. People who worked in an airline could come from different countries. In years gone by the airline personell in a particular country were often seen as the ambassador unofficial of that country. In many cases the airline’s local commercial and operational staff were pioneers and became a help to anyone – especially those visiting that country for the first time. Rumours used to abound that local staffers of Pan Am, TWA and Northwest were often secretly operatives of the CIA. BOAC local staffers were viewed as part of the Empire. And Air France local agents could be secret agents of the Sûreté.
The reverse was also often true, multi-culturalism spread from the remote offices to the head office. A local who wanted to climb hirer in the organization could only do so by transferring to the Head Office. Thus within an airline frequently you would find people of different cultures and countries of origin.
However the emergence of the Global Alliances has in effect ended this golden age of airline cultural exchange.
Now as each airline withdraws its ex-pat staffers back home and the local country staff are managed often by that country's local staff of the home airline – those days have come to an end. Now Germans serve United customers in Frankfurt, Air France people service Delta customers in Paris, and Japanese JAL employees service British Airways passengers.
From a customer service point of view – I see this as a very bad thing. How many times have I been told by an Air France person that my Delta status is worth nothing when it comes to a problem. And in the USA United personnel look at me as if I am from out of space when I try to use my LH credentials.
Overall I think this is sad that we are losing one of those little quirks of the airline business. It also means that an overseas posting is now unlikely for an airline manager. Thus I believe the airline business as a whole will lose some of its attraction to the brighter stars of the next generation. So Global Alliances homogenize everything to the lowest common denominator. What you get - if you like - is the airline equivalent of Beige Boxes. More Silos!
So farewell good people. And thanks for the ride. It has been a lot of fun.
Cheers
24 July 2010
So OneWorld makes 3 across the Atlantic.
So the homogenization of the airline world is almost complete. With now more than 90% of the traffic across the Atlantic under the control of the 3 Alliances the airline world has become something of a boring place.
From a strategic perspective I believe that the creation of this risk sharing – mergers in all but name – alliances create as many issues as they solve. From a user’s perspective – IE the flyer, and as speaking as a frequent flyer, I cannot say that the rewards of the so called “seamless” experience are that great. Frankly I believe they are still a myth in the mind of the airline marketing departments. Let me illustrate this with a simple pair of examples from Star/Atlantic Alliance Plus:
Star Alliance – Transatlantic Alliance A++ AC,CO, LH UA. LH has first class as does UA. CO and AC do not. UA and CO have premium economy, AC and LH do not.
An itinerary NUE-FRA-YYZ-IAH-CCS-IAD-FRA-NUE should be (logically) possible all on A++ carriers and Transatlantic. Not so – the CCS legs are outside of the alliance and therefore have to be either added as a separate flight or as one ways. Any solution would up the price significantly.
I use these to illustrate the issue not to pick on Star/A++ specifically. I believe that the airlines have a long way to go to make the experience truly hassle free. However I think it is getting better. But it takes a very long time and the hype decidedly does not live up to the delivery. I hope that the regulators are paying close attention to the issue. When these alliances anti trust immunity comes up for renewal. I hope that they look at the issues for the customer. In my view the benefits to the customer should be considered as follows:
1. Better choice of schedules – ie more not less flights
2. Lower fares or at least no comparative increase in fares. I also think that the consideration of Frequent Flyer miles should be added to the equation, so that the currency of FF miles be considered as part of the cost equation.
3. Ease of use – to get from A to B should not be harder. Therefore in considering the value of an alliance – the customer issue of nonstop vs connections should also be considered. For example did the alliance reduce the number of nonstop routes in the broader market?
4. The hassle factor. Did the Alliance truly reduce the amount of trip hassle for the customer – of all types not just premium traffic.
If we are truly to regard this as a benefit then a truly objective and transparent mechanism for assessing Alliances should be put in place. I believe that players have the right to set their own standards in an open market. However when the marketplace is restricted to only 3 major players with such a large percentage of the market – then the standards of care and customer value must be put at a high premium. This includes the ability of the governments to force the players to undo their arrangements. Currently these standards are not in place and all that seems to have happened is a lot of talking without consumer consideration. Given how much money the airlines are going to make this year as a result of their oligopoly power – I think this should be a consideration. And with OneWorld now the third man in – we have to be very careful.
Cheers
From a strategic perspective I believe that the creation of this risk sharing – mergers in all but name – alliances create as many issues as they solve. From a user’s perspective – IE the flyer, and as speaking as a frequent flyer, I cannot say that the rewards of the so called “seamless” experience are that great. Frankly I believe they are still a myth in the mind of the airline marketing departments. Let me illustrate this with a simple pair of examples from Star/Atlantic Alliance Plus:
Star Alliance – Transatlantic Alliance A++ AC,CO, LH UA. LH has first class as does UA. CO and AC do not. UA and CO have premium economy, AC and LH do not.
An itinerary NUE-FRA-YYZ-IAH-CCS-IAD-FRA-NUE should be (logically) possible all on A++ carriers and Transatlantic. Not so – the CCS legs are outside of the alliance and therefore have to be either added as a separate flight or as one ways. Any solution would up the price significantly.
I use these to illustrate the issue not to pick on Star/A++ specifically. I believe that the airlines have a long way to go to make the experience truly hassle free. However I think it is getting better. But it takes a very long time and the hype decidedly does not live up to the delivery. I hope that the regulators are paying close attention to the issue. When these alliances anti trust immunity comes up for renewal. I hope that they look at the issues for the customer. In my view the benefits to the customer should be considered as follows:
1. Better choice of schedules – ie more not less flights
2. Lower fares or at least no comparative increase in fares. I also think that the consideration of Frequent Flyer miles should be added to the equation, so that the currency of FF miles be considered as part of the cost equation.
3. Ease of use – to get from A to B should not be harder. Therefore in considering the value of an alliance – the customer issue of nonstop vs connections should also be considered. For example did the alliance reduce the number of nonstop routes in the broader market?
4. The hassle factor. Did the Alliance truly reduce the amount of trip hassle for the customer – of all types not just premium traffic.
If we are truly to regard this as a benefit then a truly objective and transparent mechanism for assessing Alliances should be put in place. I believe that players have the right to set their own standards in an open market. However when the marketplace is restricted to only 3 major players with such a large percentage of the market – then the standards of care and customer value must be put at a high premium. This includes the ability of the governments to force the players to undo their arrangements. Currently these standards are not in place and all that seems to have happened is a lot of talking without consumer consideration. Given how much money the airlines are going to make this year as a result of their oligopoly power – I think this should be a consideration. And with OneWorld now the third man in – we have to be very careful.
Cheers
Is Skype No Longer Real Time?
I think we all love Skype (if you are not a Skype user then you really should be!) But lately I have noticed that Skype is a little slow in delivering messages.
It used to be that Skype would hold a message if you were not logged on until you were there - then it would update. But lately I have noticed that some times it doesn't do this for DAYS!
I hope this is just an aberration because I really do love to use the application for leaving messages.
I would hate to see those chaps at eBay start to mess with Skype and that I have to defect to another service. The utility value of Skype I place WAY above Facebook and Linked in.
Cheers
It used to be that Skype would hold a message if you were not logged on until you were there - then it would update. But lately I have noticed that some times it doesn't do this for DAYS!
I hope this is just an aberration because I really do love to use the application for leaving messages.
I would hate to see those chaps at eBay start to mess with Skype and that I have to defect to another service. The utility value of Skype I place WAY above Facebook and Linked in.
Cheers
19 July 2010
Nexus One = Boat Anchor. What Lessons?
I like the nautical themes since I am at the seaside this week. As I type this I am listening to the sound of the Atlantic pounding some rocks.
Quietly on Apple's big iPhone day - Google pulled the plug on Nexus One. Here is an article from InfoWorld
Now I wonder what does this tell us about Google's ability to provide a consumer facing product? Is there a lesson for the Google/ITA acquisition?
Hmmm now that's a thought!
Cheers
Quietly on Apple's big iPhone day - Google pulled the plug on Nexus One. Here is an article from InfoWorld
Now I wonder what does this tell us about Google's ability to provide a consumer facing product? Is there a lesson for the Google/ITA acquisition?
Hmmm now that's a thought!
Cheers
A Free Case For Your (i4) Boat Anchor
Steve – aka the Dark Lord – has come out fighting on the issue of the iPhone 4’s er connection issue.
He says it has been blown out of proportion and that the media is to blame (sound like anyone else we know?).
Well Steve – this is life. Suck it up.
Apple has like almost every tech company – including many that I have been with – had its share of misfortunes. It is part of the way technology is. What works for some doesn’t work for others. Users expect computers to be infallible. To know the perfect answer. An iPhone is a work of beauty but it has to work as a basic function. Namely it has to work as a telephone. The issue of the antenna – which is among several other issues is that it needs to work normally. I believe from several iPhone 4 users I have spoken to – that the issue is sporadic. For one old time iPhone user – he explained he is as frustrated with the problem as when the iPhone 1 first came out and would disconnect in mid call when moving between towers. The Apple faithful have flamed me a few times for making an issue of the iPhone. Just the facts ma’am. For an empirical assessment of the iPhone from Consumer Reports which confirmed the issue – please visit their website.
I think the iPhone is a work of art and a marvelous thing. I hope Apple gets it right. My objection to it remains the business model and the fact that it is a license to print money. Given the money Apple is making from the iPhone – I believe they have an obligation to get it right.
So through the end of September you can have a case for your iPhone boat anchor. Hopefully after that the next batch will have a better antenna. I should point out that some analysts are reporting more issues with the iphone. But you can figure this stuff out for yourself.
Cheers
He says it has been blown out of proportion and that the media is to blame (sound like anyone else we know?).
Well Steve – this is life. Suck it up.
Apple has like almost every tech company – including many that I have been with – had its share of misfortunes. It is part of the way technology is. What works for some doesn’t work for others. Users expect computers to be infallible. To know the perfect answer. An iPhone is a work of beauty but it has to work as a basic function. Namely it has to work as a telephone. The issue of the antenna – which is among several other issues is that it needs to work normally. I believe from several iPhone 4 users I have spoken to – that the issue is sporadic. For one old time iPhone user – he explained he is as frustrated with the problem as when the iPhone 1 first came out and would disconnect in mid call when moving between towers. The Apple faithful have flamed me a few times for making an issue of the iPhone. Just the facts ma’am. For an empirical assessment of the iPhone from Consumer Reports which confirmed the issue – please visit their website.
I think the iPhone is a work of art and a marvelous thing. I hope Apple gets it right. My objection to it remains the business model and the fact that it is a license to print money. Given the money Apple is making from the iPhone – I believe they have an obligation to get it right.
So through the end of September you can have a case for your iPhone boat anchor. Hopefully after that the next batch will have a better antenna. I should point out that some analysts are reporting more issues with the iphone. But you can figure this stuff out for yourself.
Cheers
So What’s The Real Problem and What’s The Real Answer?
The launch of Open Axis as the standards group for Airlines in Ancillary Services and Direct Connections last week caused a bit of a stir. It has definitely miffed a lot of people. The Legacy GDSs and those who depend on them are good examples of that camp. Indeed also last week at the same time that the Open Axis group was holding its inaugural press conference – in Washington there were hearings where outraged players were moaning that the airlines were not playing ball and providing the Ancillary Services information to the GDSs. I never thought I would see the day when a Hearing in the US Capitol would be held to support the GDSs!
In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).
What’s more he is right.
The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.
So are these views inconsistent?
Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:
Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.
Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.
With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.
Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.
So what are we waiting for?
In sifting through the responses over the past few days – I was enjoying a degree of reading how different groups want to see it play out. There is a very good article by Ian Tunncliffe in Travel Technology Update. (Sorry this is by subscription only). So I will give you the essence. Travel Industry Technology needs to get a life and the debate over standards is irrelevant to a market where a vendor can deploy a solution such as an iPad and get traction of thousands of Apps and users without paying any attention to such standard. (OK so this was my interpretation of the piece but I am sure Ian will forgive me for this latitude).
What’s more he is right.
The Professor definitely believes that standards help and has already put his money where his mouth is by endorsing the Open Axis standard (via my alter ego). I am also a great advocate of the Open Travel Alliance and I really hope that the two bodies come to an accommodation if nothing else.
So are these views inconsistent?
Actually not in my view and here is why. I have for a long time believed that the rigid structure of the legacy GDS controlled travel workflow restrained innovation not to mention the free flow of commerce. In the early 1980s it was very useful for piggy back technologies such as Lanyon Boards. In the 1990s the standards enabled the OTAs to come into being. However the real Travel 2.0 the one we all use didn’t want to be constrained. In the past 5 years new businesses in search and itinerary management emerged and have done a very good job. Much better than the GDSs did. So the footprint of the legacy GDS shrank further and further inwards. Having worked in extensively in the OTA world I have witnessed all the major functions of the GDS have been replicated and indeed far exceeded bar one. To wit:
Fare Search – OTAs do better – and Meta Search does just as well particularly in combining fares and availability
Availability – OTAs do better in presentation
File Management/Itinerary – OTAs do better – and Itinerary management services do even better
Customer Management – OTAs do better
Supply Chain access – GDSs do better.
Then add Web 2.0 with the Social components to it and there is no way for the legacy GDSs to hope to match that capability. Even in the interaction of their customer users they have abandoned their dedicated networks in favour of web based solutions.
With the commercial model being driven by the supply chain component – it was only natural that for both commercial and technical reasons (as well as a host of others) that the suppliers would want to tap into the broader market where innovation and customers live. This meant that there was an inevitability about the Supply side wanting to open up access to the general market. (I need not elaborate for my readers that the restraint of the GDS so called “incentives” to users is an evil thing in my view.)
And this is not just theory of the world being a happy place where the GDS model alone addresses distribution to the open market. The legacy GDS global market share of airline traffic has been falling steadily for years. Eroded by both the emergence of LCCs and the greater direct distribution by the Full Service Network Carriers.
Returning to my questions… The real problem has been that the bootstrapping of airline and travel IT to extend the old GDS based model has reached the end of its life cycle. And yes – a new world where Apps can be built and deployed in hours vs years in a far less rigid world has become the de facto standard. Open Access by what ever name has become the norm. The real answer is that we have to now go back to the core reservations systems providers – the PSS vendors – and start beating the drum of revolution. Now is the time for the IT infrastructure to become open and decidedly more nimble. I can imagine that the airlines will not like this. Decidedly the big hosting companies – Amadeus, Sabre and HP/EDS will hate it. The GDSs who have depended on this closed architecture for years are going to be very unhappy. But in my view they have no choice but to change and reform. Then we can stop having IT get in the way of business.
So what are we waiting for?
15 July 2010
Disclosure Of Fees and Charges - Ancillary Revenues
Heads up everyone - the bun fight has started.
last month in Washington - Mr Oberstar held hearings on the subject of Airline Fees.
There are several issues - taxes charged, the amount of fees and the type, the manner of charge and exceptions etc etc.
What some want - such as Kevin Mitchell - is a full disclosure and an easy way to buy the products and services equally in all channels. This challenges the core precept that airline pricing is designed to be as complex and obfuscated as possible.
This seems to have been lost in the warring factions.
In my view the way that a product is charged should be at the decision of the person who sells the product subject to things like lying and dishonesty.
At stake is a lot of money but there is clearly a set of influences at work.
So here is my view on the subject. I feel strongly that the consumer should be able to see what he is buying. But in travel he has been lied to for so long as to what the product is and what the price really is as to have been accepted as being clear.
So what do you think?
Cheers
last month in Washington - Mr Oberstar held hearings on the subject of Airline Fees.
There are several issues - taxes charged, the amount of fees and the type, the manner of charge and exceptions etc etc.
What some want - such as Kevin Mitchell - is a full disclosure and an easy way to buy the products and services equally in all channels. This challenges the core precept that airline pricing is designed to be as complex and obfuscated as possible.
This seems to have been lost in the warring factions.
In my view the way that a product is charged should be at the decision of the person who sells the product subject to things like lying and dishonesty.
At stake is a lot of money but there is clearly a set of influences at work.
So here is my view on the subject. I feel strongly that the consumer should be able to see what he is buying. But in travel he has been lied to for so long as to what the product is and what the price really is as to have been accepted as being clear.
So what do you think?
Cheers
14 July 2010
Here It Comes - Spanish Fly
OK so the headline is a bit hokey but BA and Iberia have had their merger blessed. So now we have definitely have airlines in Europe who are part of a cabal and have not airlines who are - well have not players.
The big 3 groupings of legacy carriers are the expected players -
BA (OneWorld)
AF (Skyteam)
LH (Star)
Their partners cover almost all of Europe. However and in my view this is a good thing - the total pie they control is much less than say in the USA. Ryanair, Easyjet Air Berlin and Wizz all represent a sizeable chunk of the EU market. With North America pretty much aligned and Europe the same - there really is little opportunity for choice amongst consumers other than from just 3 group choices.
In my view this is going to finally dawn on the consumer that he has only 3 options plus a few minor ones when ever he is looking to buy airline seats.
did someone say pork?
Cheers
Millenials Turn Away From Facebook
Lately as regular readers of this blog will know - I have been spending time with younger users. Millenials who will represent the next generation of users. Their parents are my generation and some of them are both colleagues and students.
In speaking particularly to teachers I have found that there is a greater awareness of the lack of attention with the distractions available to teens and recent adults. I am not criticizing them in any way. This is a fact of life. This will have a major impact on their interaction with the products and services we create in Travel.
eMarketer cites several studies in a recent piece on defections. What is particularly worrying as to how many just find it boring with generally the high abandonment rates.We are approaching a problem I have long suspected exists. We actually have too many shiny objects to cope with. As a result we lose interest and move onto the next thing. And if we - (in my case as a Boomer) - lose interest quickly just think how difficult it is to maintain the interest of a Millenial?
In my opinion we need to start to engage differently with the emerging user generation(s). That means we have to do a better job of providing access to the services.
Key amongst these will be:
A social component.
Individual content
more implicit interaction (ie a direct opposite to the current explicit interaction required).
Engaging and maintaining interest by constant refreshing.
it is the last one that makes me cringe because keeping things fresh is always hard. For the travel industry - that has been assumed to be fresh content - new products and promotions. But in my view it has to be deeper. Don't please ask me how yet - I am just coming to grips with the issue.
I do know however that if we don't then the abandonment rates for travel products and services on the web will rise. And travel sites will become as yesterday's news as Second Life and Myspace.
Cheers
12 July 2010
"Who Do You Love?" Or Trust...
That old Bo Diddly song was stuck in my head the other day. Actually the Geoerge Thorogood version. And I have been thinking more and more about the essence of Trust. It just amazes me in Travel how much consumers are expected to trust and are constantly let down.
And then I read two stories from emarketer. Both related to Trust. The first one related to consumers perspectives with regard to trusting Facebook. Interestingly they were more concerned with the commercialization than the abuse of their personal data.
The second item from the same day by emarketer was on the acceptance of mobile marketing messages. Today we are bombarded with the "year of the mobile" messages from interested parties. Yet the first truly mobile commerce generate - the Millenials are none to happy about being marketed/spammed via their mobile devices.
This doesn't bode well for people expecting to make squillions of dollars by sending messages (unsolicited) to mobiles - smart or dumb.
So dear friends - think very carefully about what you are doing before you go down that path...
Cheers
Apple to Face EU Probe
Seems like its the Government's turn to focus a little this week. It also seems like someone was listening or they are just plain smart. I will take either!
The EU is going to launch a probe into Apple’s iPhone business practices. Specifically they are going to investigate two of the 4 revenue streams and possibly the others as well.
The App Store is one, the other is the interoperability of iPhone and other phone systems. This is likely to extend into the Admob/iPhone dispute.
For a detailed read – go here:
Click here to read full story...
Cheers
The EU is going to launch a probe into Apple’s iPhone business practices. Specifically they are going to investigate two of the 4 revenue streams and possibly the others as well.
The App Store is one, the other is the interoperability of iPhone and other phone systems. This is likely to extend into the Admob/iPhone dispute.
For a detailed read – go here:
Click here to read full story...
Cheers
What Level of Scrutiny on Google + ITA, (aka Troogle)?
This was not going to be a quick and short post as I could use all my Professor skills to analyze the issue. However in starting to do some research on the subject I went back and visited some of my old posts on the subject. I have long felt that Google was already a monopoly in Travel before the acquisition. Troogle has a hot topic in 2008 and 2009. Then the chatter died down. So I reprint here for your edification and reading pleasure a post I did last year on the subject on what I think the Obama Administration is planning to use as a frame of reference on Google’s activities in travel.
Here are a few salient points.
1. I believe that the review time will take more than Admob. In the case of Admob – there are a large number of different options and it is a nascent business too early in its cycle to say that there will be a single business who can dominate.
2. Travel is a more defined category and the tentacles of the dark side that Google has become stretch far and deep and wide.
3. US law will prevail and US law is very specific in this area of what defines monopoly and how it can impact the transaction. (see below)
But – I want to be clear that I do not necessarily believe that Troogle will be bad for the industry. There are now clear winners and losers who will be impacted by the transaction. The world of GDS dominated distribution for one is probably headed for the sunset. The cost structure of meta-search on both the supply side and the seller side will be seriously impacted to the point where meta search may become irrelevant.
So what do you think? Let me know directly or privately.
Cheers
REPRINT POST August 31st 2009:
[Professor Sabena's Blog] Is Google A Monopoly?
I have this uneasy feeling about Google. The power they wield is significant. Fine if they don't abuse it - or is it? And what if they do actually use their power and abuse it?
I have written columns on this going back to 2006, here are two of my older posts on the subject:
http://t2impact.blogspot.com/2006/10/that-giant-sucking-sound-is-google.html
http://t2impact.blogspot.com/2009/08/is-google-new-evil-face-of-it.html
It seems that the Seattle Times and other Media outlets have started to feel the same way too. Today's editorial was somewhat less than subtle. The Times (a right wing paper in my view since it crushed the old Seattle PI), is calling for Google to be investigated for being in violation of the Sherman Act.
http://seattletimes.nwsource.com/html/editorials/2009766680_edit31google.html
A quote from the Obama Administration assistant attorney general for antitrust, Christine Varney, as saying that Google was America's most obvious antitrust problem — Microsoft was "so last century" she said... ouch.
The editorial called for an investigation of Google under the Sherman Act. Section 2 which says:
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony...
That has been the law of the United States since 1890. All it requires (per the Seattle Times) is that the Justice Department pick it up and use it.
Should we accept that Google is being altruistic all the time or is there something more sinister about Google? It seems that Google's hand has to be forced sometimes - hardly the behavior of a good global citizen.
For my own part - I am happy to use the Google search engine but I remain leery of Google's force in the market. It is downright scary the amount of power they have.
So what do you think?
Cheers
--
Posted By Professor Sabena to Professor Sabena's Blog at 8/31/2009 12:36:00 PM
Why Troogle Google?
With the Google + ITA acquisition now public, we can now evaluate how this will impact the world of travel. As I wrote in the 3 part series on search,(INSERT LINKS HERE) I have long felt that search was akin to an unnatural act and one that left the customer un-satisfied. I also opined that failure of the travel industry in its own right to address its deficiencies in search would open the world to Google coming in and changing the way search is addressed. But I regarded that while not necessarily as a bad thing for the consumer – it would change the dynamics of the Travel Industry Sector.
In the 3 part series I wanted to evangelize the concept of natural search. This did not mean that navigation to specific elements of travel was a bad thing, but the overly explicit nature of search in travel has long been too constrained by – in my opinion – a GDS like constrained process.
In my view the convergence of some key factors would drive change in from conventional search to natural search.
• The consumer-facing conventions make it possible
• Loosely coupled technology through mash-ups breaks the bonds of the supply controllers who held sway far too long over travel
• It also makes it far easier to make everything work – less dependency on making sure the tightly choreographed ballet of interlocking pieces actually function. Banish the word “seamlessly”. But don’t drop the word fast.
• Geo-location – mapping is finally ubiquitous.
• The line between mobile and fixed position makes the definition between the two largely irrelevant
• The supply side has better infrastructure and processes (not to mention better technology) to support Natural Search.
• The Cult of Individualism is a natural state and a natural act.
Over time the GDS based model has shown itself to be a false profit for the consumer’s need for access to information. As a result the GDS imposed workflows in search/shop became the highly constrained standard because it was necessary in order to get access to the final mile of the transaction namely the price/book/ticket.
Search and Shop outside of the GDS model suffered from a lack of trust. The various attempts by Meta search companies such as Kayak etc resulted in a permanent time delay of salient information. Thus you, the consumer could never shop in a trusted mode. And suppliers wondered why consumers didn’t have loyalty and trust??? With Troogle there are now several of these elements consistent and the results can be very different and trustworthy. This in my view is what the Google management team meant when they said they were “… building something that the industry has never seen before."
At WIT this year – I will expound on this subject and illustrate what I believe will be a way to address this.
But I think I made it abundantly clear that if Google had a mind to they would use some of their clout (and considerable cash pile) to address the subject and hurry the process along.
Commercially you have to ask why would Google plonk down $700 million in cash for ITA.
• Could it be for their revenue and commercial basis? If that was the case then the transaction would be up there with Sabre’s purchase of GetThere at $757 million at the height of the Internet Boom. So no not that alone – but over time Sabre was able to dominate a sector.
• If it was for the technology alone – I am sure that someone could replicate this for a lot less money. And indeed in my opinion at least one company has.
• Could it be for their Intellectual Property? ITA has a considerable number of important patents that I have previously stated could be very tough for the industry to challenge. Not that they should not be challenged but that the clout of Google and its legal team would make the relative minnows in travel hard to stomp up the cash for a protracted legal challenge.
• Could it be for their Hotel and/or Needlebase technology? Hardly try and play with it. It’s nice but hardly makes a dent in $1-2 million let alone that number of zeros.
• Could it be for their customer base? Very important – but not perhaps in the way you may think. ITA provides assured access backed by both technical and commercial service agreements that ensure that the data they provide is current. With Virgin Atlantic now joining the group of QPX users – the spread of Full Service carriers is broadening considerably. Yes there is a nice value to this one.
• Could it be the value of disintermediating several players in travel? Ah now you are talking. Consider the annual revenues for legacy GDSs and that number is big and very fat and ripe for diverting Google’s way.
• Could it be for eliminating meta search players with better solutions? This is an obvious answer. Yes but not the prime one.
• Could it be for filling the holes in some Machiavellian plan to dominate the Travel Industry? Hmmmm time will tell the answer to that question. Does it match Google’s vision of the world. Absolutely!
But are these enough? The correct answer is of course all of the above, and many more I have not outlined here.
Now the challenge is how to deal with the whole notion of the travel process from ideation through to sale. The world just changed and you and I have to change with it.
Cheers
03 July 2010
Did You Miss This - Woot
I love Woot. It is a hark back to the glorious days of a single but extremely focused application.
One product each day. It is addictive to watch it. Surprising then is that Amazon has plonked down a bunch of cash to acquire the irreverent site.
Check out their sarcastic comments here
Now just imagine for Travel that there was a singular "Best Deals" site.
Now that's a thought.
Cheers
One product each day. It is addictive to watch it. Surprising then is that Amazon has plonked down a bunch of cash to acquire the irreverent site.
Check out their sarcastic comments here
Now just imagine for Travel that there was a singular "Best Deals" site.
Now that's a thought.
Cheers
What Level of Scrutiny on Google+ITA (aka Troogle)?
This was not going to be a quick and short post as I could use all my Professor skills to analyze the issue. However in starting to do some research on the subject I went back and visited some of my old posts on the subject. I have long felt that Google was already a monopoly in Travel before the acquisition. Troogle has a hot topic in 2008 and 2009. Then the chatter died down. So I reprint here for your edification and reading pleasure a post I did last year on the subject on what I think the Obama Administration is planning to use as a frame of reference on Google’s activities in travel.
Here are a few salient points.
1. I believe that the review time will take more than Admob. In the case of Admob – there are a large number of different options and it is a nascent business too early in its cycle to say that there will be a single business who can dominate.
2. Travel is a more defined category and the tentacles of the dark side that Google has become stretch far and deep and wide.
3. US law will prevail and US law is very specific in this area of what defines monopoly and how it can impact the transaction. (see below)
But – I want to be clear that I do not necessarily believe that Troogle will be bad for the industry. There are now clear winners and losers who will be impacted by the transaction. The world of GDS dominated distribution for one is probably headed for the sunset. The cost structure of meta-search on both the supply side and the seller side will be seriously impacted to the point where meta search may become irrelevant.
So what do you think? Let me know directly or privately.
Cheers
POST August 31st 2009:
[Professor Sabena's Blog] Is Google A Monopoly?
I have this uneasy feeling about Google. The power they wield is significant. Fine if they don't abuse it - or is it? And what if they do actually use their power and abuse it?
I have written columns on this going back to 2006, here are two of my older posts on the subject:
http://t2impact.blogspot.com/2006/10/that-giant-sucking-sound-is-google.html
http://t2impact.blogspot.com/2009/08/is-google-new-evil-face-of-it.html
It seems that the Seattle Times and other Media outlets have started to feel the same way too. Today's editorial was somewhat less than subtle. The Times (a right wing paper in my view since it crushed the old Seattle PI), is calling for Google to be investigated for being in violation of the Sherman Act.
http://seattletimes.nwsource.com/html/editorials/2009766680_edit31google.html
A quote from the Obama Administration assistant attorney general for antitrust, Christine Varney, as saying that Google was America's most obvious antitrust problem — Microsoft was "so last century" she said... ouch.
The editorial called for an investigation of Google under the Sherman Act. Section 2 which says:
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony...
That has been the law of the United States since 1890. All it requires (per the Seattle Times) is that the Justice Department pick it up and use it.
Should we accept that Google is being altruistic all the time or is there something more sinister about Google? It seems that Google's hand has to be forced sometimes - hardly the behavior of a good global citizen.
For my own part - I am happy to use the Google search engine but I remain leery of Google's force in the market. It is downright scary the amount of power they have.
So what do you think?
Cheers
--
Posted By Professor Sabena to Professor Sabena's Blog at 8/31/2009 12:36:00 PM
Here are a few salient points.
1. I believe that the review time will take more than Admob. In the case of Admob – there are a large number of different options and it is a nascent business too early in its cycle to say that there will be a single business who can dominate.
2. Travel is a more defined category and the tentacles of the dark side that Google has become stretch far and deep and wide.
3. US law will prevail and US law is very specific in this area of what defines monopoly and how it can impact the transaction. (see below)
But – I want to be clear that I do not necessarily believe that Troogle will be bad for the industry. There are now clear winners and losers who will be impacted by the transaction. The world of GDS dominated distribution for one is probably headed for the sunset. The cost structure of meta-search on both the supply side and the seller side will be seriously impacted to the point where meta search may become irrelevant.
So what do you think? Let me know directly or privately.
Cheers
POST August 31st 2009:
[Professor Sabena's Blog] Is Google A Monopoly?
I have this uneasy feeling about Google. The power they wield is significant. Fine if they don't abuse it - or is it? And what if they do actually use their power and abuse it?
I have written columns on this going back to 2006, here are two of my older posts on the subject:
http://t2impact.blogspot.com/2006/10/that-giant-sucking-sound-is-google.html
http://t2impact.blogspot.com/2009/08/is-google-new-evil-face-of-it.html
It seems that the Seattle Times and other Media outlets have started to feel the same way too. Today's editorial was somewhat less than subtle. The Times (a right wing paper in my view since it crushed the old Seattle PI), is calling for Google to be investigated for being in violation of the Sherman Act.
http://seattletimes.nwsource.com/html/editorials/2009766680_edit31google.html
A quote from the Obama Administration assistant attorney general for antitrust, Christine Varney, as saying that Google was America's most obvious antitrust problem — Microsoft was "so last century" she said... ouch.
The editorial called for an investigation of Google under the Sherman Act. Section 2 which says:
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony...
That has been the law of the United States since 1890. All it requires (per the Seattle Times) is that the Justice Department pick it up and use it.
Should we accept that Google is being altruistic all the time or is there something more sinister about Google? It seems that Google's hand has to be forced sometimes - hardly the behavior of a good global citizen.
For my own part - I am happy to use the Google search engine but I remain leery of Google's force in the market. It is downright scary the amount of power they have.
So what do you think?
Cheers
--
Posted By Professor Sabena to Professor Sabena's Blog at 8/31/2009 12:36:00 PM
Occasional Flashes of Brilliance... and Fear
Today was not a good day for the South American Football Teams. The passion and the sheer drive of the Latins were sadly no match for the methodical onslaught of the Europeans. Well at least that's how the German's played - wearing down Maradonna's mob.
And so it would seem to be for some of the traditional power houses of travel. Google's onslaught puts them now in a very commanding position in sector that will be hard to unseat them - or avoid the long shadow they now cast. As I noted in the TNooz panel - the ITA purchase puts them in a commanding position in many facets of the travel ideation through purchase.
As PhocusWright noted "they claim to be building something that the industry has never seen before." And this is because they are now in a commanding position with more fingers in more pies than any other player - end to end.
But perhaps one of the biggest elements as far as I am concerned is that they have the ability to fundamentally change the rules as far as data quality and assured price offers. The veneer of "its good enough" has now changed and this is where the the old model will expire in the face of better technology as well as a solid business model.
So let me leave you with one thought. If you examine who has been making more money out of travel over the past 5 years 0 the fattest cats are the GDSs. Followed closely by Google. Those large EBITDAs quoted for Amadeus are now in the cross hairs of the boy wonders.
If anyone doubts that the GDS revenue stream was not one of the driving forces for Google - then they are clearly naive. So correctly the meta search players - as distinct from those who are active in real search and the legacy GDS players are to me the most vulnerable.
The formation of the OpenAxis group and the announcement of its formation on the day that Google announced its acquisition of ITA can hardly be seen as disconnected.
Be afraid - be very afraid if that is the game you are in.
Cheers
02 July 2010
So Apple Steps up and Acknowledges Too Fast Too Soon... But....
The iPhone has suffered what could be seen as a pretty hefty hit to its credibility. And for once the Professor didn’t have to harp on about it.
The complexity of the system integration causes it to – well become pretty useless as a device for which its primary purpose is – er – communication. I have been somewhat aghast at the poor quality of Smart Phones. I am a Crackberry user but in general do not like using the device as a phone. My preferred mobile is very much a phone but the swapping of sim cards and having to be very careful about how I use it drives me nuts.
In Apple’s case it’s highly oiled black turtle necked spin machine could not stop the huge groundswell about the set of problems that users had with the new device. As one new (and very unhappy) user told me – it was an interesting small desktop computer.
If it’s all the same to you – I will pass.
Cheers
The complexity of the system integration causes it to – well become pretty useless as a device for which its primary purpose is – er – communication. I have been somewhat aghast at the poor quality of Smart Phones. I am a Crackberry user but in general do not like using the device as a phone. My preferred mobile is very much a phone but the swapping of sim cards and having to be very careful about how I use it drives me nuts.
In Apple’s case it’s highly oiled black turtle necked spin machine could not stop the huge groundswell about the set of problems that users had with the new device. As one new (and very unhappy) user told me – it was an interesting small desktop computer.
If it’s all the same to you – I will pass.
Cheers
Greece Finds a Home For the A340s
Having been parked somewhat forlornly at ATH, the Greek Government is due to receive a large reward for its patience. Greece expects US$122 million from sale of four ex-Olympic Airlines A340-300s.It acquired them as part of the overall deal when it sold off Olympic to a banker.
These aircraft have been parted for the better part of a year at ATH. See the picture captured by the Professor last month
Now what to do with those 737s and the ATRs.
Will the States Get Greedy And Use New Legislation to Tax Ancillary Services?
Just as a new standards group called OpenAxis emerges from the group aligned with Farelogix - there are a few clouds on the horizon.
The first was the hissy fit that Mike Premo of ARC had earlier this week on the slow adoption of EMD.
The other is the looming issue of taxation.
A new bill has just been introduced into the US Congress. The “Main Street Fairness Act” was formally introduced in the U.S. House of Representatives on July 1st 2010. If passed into law, it would require e-commerce companies to collect sales taxes, and thereby undoing judicial rulings and previous Administrations promises that exempted Internet and catalog retailers from collecting sales taxes in states where they do not have a physical presence. Sponsored by Massachusetts Congressman William Delahunt, the legislation ostensibly is in response to increasing pressure from state and local governments to increase tax revenues. As Ancillary Revenues are clearly subject to such taxation regimes it would cement the how a local jurisdictions could indeed demand tax.
If it is enacted, i expect a ripple out effect. The vast majority of e-commerce sites will begin collecting sales taxes, thereby reducing the perceived price advantage of shopping online.
Legislation would require sales tax collections on B2C Internet sales that are not exempt or otherwise accounted for.. The proposed legislation would require almost all online retailers to collect sales taxes in the states that adopt the Streamlined Sales Tax Project, an effort to simplify disparate tax laws and ease compliance. However it is safe to assume that there will be a period of time for adoption and their eminences (the judiciary ) will want to exert some form of stamp on this.
Interesting twist… stay tuned
The first was the hissy fit that Mike Premo of ARC had earlier this week on the slow adoption of EMD.
The other is the looming issue of taxation.
A new bill has just been introduced into the US Congress. The “Main Street Fairness Act” was formally introduced in the U.S. House of Representatives on July 1st 2010. If passed into law, it would require e-commerce companies to collect sales taxes, and thereby undoing judicial rulings and previous Administrations promises that exempted Internet and catalog retailers from collecting sales taxes in states where they do not have a physical presence. Sponsored by Massachusetts Congressman William Delahunt, the legislation ostensibly is in response to increasing pressure from state and local governments to increase tax revenues. As Ancillary Revenues are clearly subject to such taxation regimes it would cement the how a local jurisdictions could indeed demand tax.
If it is enacted, i expect a ripple out effect. The vast majority of e-commerce sites will begin collecting sales taxes, thereby reducing the perceived price advantage of shopping online.
Legislation would require sales tax collections on B2C Internet sales that are not exempt or otherwise accounted for.. The proposed legislation would require almost all online retailers to collect sales taxes in the states that adopt the Streamlined Sales Tax Project, an effort to simplify disparate tax laws and ease compliance. However it is safe to assume that there will be a period of time for adoption and their eminences (the judiciary ) will want to exert some form of stamp on this.
Interesting twist… stay tuned
27 June 2010
Now Will FIFA Reform?
Earlier this year the FIFA mafia came down hard on the South African Airline Kulula. For a tongue in cheek advert.
All through the World Cup so far - FIFA has presented itself as the holier than though position. After the appalling decisions of the referee, Uruguayan Jorge Larrionda. The mistake by the officials will heighten the demand for goal-line technology – an ideology currently opposed by FIFA president Sepp Blatter. There is no way that nationality and history do not play a part. Perhaps it would have been more appropriate for FIFA to conveniently forget history and appoint such an official. Why not a Mexican or Brazilian official?
Now is the time for the entire FIFA KGB like organization to be frog marched off and replaced by a more modern open management. At the very least they should be transparent. So let's talk about Mr Blatter. According to Wikipedia (yes friends I dont make this stuff up)... "Blatter was elected president of the World Society of Friends of Suspenders, an organisation who tried to stop women replacing suspender belts with pantyhose".
Sure Germany was the better side in the end but to deny England its moment is surely something that will haunt the country for another 4 years at least.
Your disgustedly...
All through the World Cup so far - FIFA has presented itself as the holier than though position. After the appalling decisions of the referee, Uruguayan Jorge Larrionda. The mistake by the officials will heighten the demand for goal-line technology – an ideology currently opposed by FIFA president Sepp Blatter. There is no way that nationality and history do not play a part. Perhaps it would have been more appropriate for FIFA to conveniently forget history and appoint such an official. Why not a Mexican or Brazilian official?
Now is the time for the entire FIFA KGB like organization to be frog marched off and replaced by a more modern open management. At the very least they should be transparent. So let's talk about Mr Blatter. According to Wikipedia (yes friends I dont make this stuff up)... "Blatter was elected president of the World Society of Friends of Suspenders, an organisation who tried to stop women replacing suspender belts with pantyhose".
Sure Germany was the better side in the end but to deny England its moment is surely something that will haunt the country for another 4 years at least.
Your disgustedly...
Monetizing Social Media
OK I admit it – the Professor is decidedly skeptical when it comes to the economic value of Social Media. I have a hard time figuring out if there is anything actually good about Social Media other than it is the ultimate thief of time. Sucking out our lifeblood like a leech – a resource that is unrecoverable. Somehow on my holiday here in Greece where I am writing this post – no one among the locals seem to care about Social Media. I haven’t heard one Greek talk about Facebook. Actually other than the odd smattering of Brits and French few have been talking about it. Even under probing – few here in this little Cretan village seems to care.
So I was pleasantly surprised that someone has actually tried to put a value on this phenomena. Digital consulting firm Syncapse and research company Hotspex have come up with an empirical formula that puts an average value of $136.38 on the Facebook fans of the site’s 20 biggest corporate brands. I feel very uncomfortable about becoming a “fan” of anything. According to one of the online dictionaries a fan is” An ardent devotee; an enthusiast” Sorry but I don’t think I buy the whole “ardent “thing here.
Here are the results as presented by eMarketer.
Do I really think this is a valid formula – well I will keep my sense of skepticism for now thank you. For now I will just say that we are too early in the cycle to say if this will be the ultimate trend. I definitely think that one doesn’t need research to tell you some common sense things like the ground is hard. Monetizing the value of “loyalty” for example is a far harder thing to quantify. I would say consistently that is impossible.
Still this is pointing to some interesting ways we can evaluate things. But for now let me just say – I am happy being unquantified. Pass the Raki!
Cheers
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