By now, you have certainly heard about Google's plans to acquire ITA Software for $700 million. ITA is a remarkable company that made its business and its fortune by making sense out of airline flight data. By some reports, ITA data now supports over 65% of all airline bookings. As just one metric, ITA servers process over one million travel queries per second.
The big question everyone is asking of Google is "why travel?" The more important question we are asking is, "why data?"
There are a couple of relatively simple explanations for why Google is chasing the travel vertical. First, it's a huge market that touches almost everyone at some point. If Google can do a better job with travel-related search results, it pleases a lot of its users, keeping them loyal and happy. From a financial perspective, travel involves huge numbers of relatively high-value transactions. The more Google can inject itself into this mix, the better positioned it is to make money as an intermediary. Many punidts see Google moving to cost-per-action (CPA) pricing in travel. In other words, it will be selling leads to travel providers. It's also possible that Google is looking over its shoulder at Microsoft's Bing search engine, which singled out the travel vertical for special attention since its inception.
But let's get to the more relevant question: why data? An article in Seeking Alpha does a nice job of summarizing the ITA deal and where Google is likely to go in travel. It then ends with two remarkable sentences:
"If Google does start to go after vertical search in the same way that Bing does already, search results will look a lot less uniform than they do today. Those much-maligned "ten blue links" just don't cut it anymore."
Wow! There seems to be an emerging consensus that plain vanilla search is getting a bit tired and may not in fact deliver the best possible results for every conceivable query. Indeed, travel is a wonderful example of this. You wouldn't even consider trying to find a flight between New York and Los Angeles using Google. It's somewhere between impractical and impossible. The only way to fix that problem: introduce structured data content into the mix. In short, the world is now starting to realize what data publishers have always known: for many types of searches, fielded, parametric search is much more productive than full-text searching. Google seems to be tiring of trying to develop programs to synthesize structure where none exists.
Indeed, a number of pundits see Google moving increasingly into vertical search. It's already been reported that Google is interested in real estate listings data. What we're likely to see is Google move into a number of the largest B2C markets, snap up key data providers, and build out optimized vertical search platforms in those markets. And it's not just Google. Just today, Yahoo announced its real estate listings would be powered by Zillow.
Longer-term, my sense is that Google is going to morph into a whole new type of search engine, moving away from its historical insistence that it can provide a "one size fits all" solution. This will, I believe, also begin to shake advertisers out of their belief that Google is the optimal, "one size fits all" online advertising solution. Coupled with this implicit endorsement of vertical search by Google, I'd say this could be longer-term good news for those of us already in the vertical search business, particularly B2B markets where Google is far less likely to play.
This is just one more waypoint in a long and fascinating journey. Buckle up!
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