Do you know the biggest downside of running a huge business? Obstacles and objections.
If you own a big business, such as Google, your every business decision will affect a lot of people, including other businesses. The proposed $700 million acquisition of ITA Software, THE software that powers most of Google’s rival in travel niche, such as Expedia (Expedia, Hotwire, TripAdvisor,) Kayak (Kayak, SideStep) and Sabre Holdings (Travelocity) – the travel search company.
Facing the potential loss in travel search market share, they obviously won’t stay still.
FairSearch.org was born to contest Google-ITA deal
As reported by WebProNews, several big travel companies have joined force in the formation of the Fair Search, promoting fair competition, transparency and innovation in online search. They also ask the U.S. Department of Justice to do something with the deal.
Of course, the focus of Fair Search is to contest Google’s ITA acquisition, which enables Google to both monopoly and manipulate the online search – the travel search in particular.
The argument of Fair Search points out that the acquisition will lead to higher price, less choice in online travel, and probably the end of competition in online travel (including some online travel businesses get kicked out from the competition) – which is could be the case if the deal move forward. Experts also voice the same concerns – check out these FairSearch.org slides:
I couldn’t agree more with what the experts say; the deal will change the travel industry into the whole new ball game, which could result in some negative issues.
Some travel businesses – especially Google search’s rivals – could get pushed away from the online travel bandwagon. For other travel firms, including airlines – expect to get “special treatment” by Google. For example, the need to pay a certain amount of fees to get them listed on Google’s global search results.
Travelers seeking deals online should expect fewer choices, as there’s virtually nothing to compare deals to – Google owns most of the online travel search pie, remember?
Of course, the above are concerns, not facts – yet. However, the travel firms have all the rights to be concerned about the deal – it’s their source of income we are talking about!
The Google-ITA deal one of the examples of how a big fish can eat smaller fishes conveniently. Google could easily say, “well, if you could offer $710 million – or any amount better than our offer – to ITA Software, then go ahead buying the software firm yourself… but you don’t do it anyway, right?”
What smaller fishes should do? Just like the real life small fishes, they should group together to build a large enough group to keep the big fishes at bay – seeking the pond’s regulator (the Government – in this case, the U.S. Department of Justice) could work, too.
One more thing – Google is not stupid. I’m sure they will work on something if the deal goes forward. Google is making a living from consumers, too – I’m not sure they will do stupid things, such as allowing higher travel prices for travelers.
Let’s see where the deal goes.
On online travel business capitalism issues