With Expedia, Orbitz, and other online travel stocks hovering just above the basement, news of Facebook and Google dancing around the travel niche cannot be thrilling. Online travel, in case you’ve been trapped in a dungeon somewhere, is about to take off like a rocket. For some that is.
Google’s announcement of the acquisition of ITA signaled the cocking of the proverbial hammer, if you are in the business of 21st Century online booking that is. Now enter Facebook, a very interesting interjection into travel dollars indeed. Facebook announced the buyout of the social network NextStop, or rather the expertise and data therein. What can they be up to? Well, a piece of $120 billion dollar online travel pie.
The Current State of Travel
According to Forrester Research, last year, online travel bookings represent nearly 40 percent of all booking bucks. Expedia, Orbitz, and a very few others have (so far) pocketed the lion’s share. But, in all honesty, just how long did they foresee such a virtual monopoly going forward? Their problem, from my perspective, is not much different from any other huge and profitable company – complacency – even greed. Why? Let me explain a little.
Expedia has proliferated the web with what you might call “satellites of success” – TripAdvisor being the biggest. The original innovation there, was significant – taking advantage of “the crowd” in as far a travel ratings and the vast network of affiliations – of course. But, like so many traditional thinking companies, Expedia only paid lip service to the social element. And then, for the most part they rested on their laurels – opps. What burns me about companies like Expedia? Their almost unlimited resources to create something far better – for you – and for them.
Orbitz? Well, maybe they just don’t have the cash? Despite positive earnings, Obritz seems content to offer Gulf Coast guarantees and traditional price incentives – for the most part any way. I covered their integration with iSeatz, but was honestly overly optimistic. The iSeatz move seemed to signal movement in the space, but like many such associations – there was no prime mover behind the deal. Many online companies fail to understand the need for traction and ongoing news – Orbitz is not alone. Without tipping any hands, I know Orbitz execs are rather closed minded or at best preoccupied with other matters. What burns me about them? The market is wide open for them to move – they won’t or can’t.
Is Microsoft in There Somewhere?
Stagnated development is something I have hammered Google about in the past, but they climbed out of that hole. For Google, direct entry into the travel game, or associative models, do not make that much difference. What they may need to be concerned about is everyone gunning for them – much of this smells like Microsoft versus Google to me. Regardless, Facebook’s most recent move does have its implications. NextStop is about going local, about buying the people who have done it, and about 100,000 or so user submitted reviews. The image below probably reveals who is behind the Facebook deal.
In a war between Microsoft and Google over the travel landscape, it is not wild speculation to suggest Expedia and the others are in a compromised situation. Will they disappear in the conflagration? No, they will “deal out” or attempt to buy similar or better methodologies. As for the “right” travel portal, the building of one? Well, going “corporate” is about deals and acquisitions you know. Though it probably should not be in the case of online travel – users deserve better than a revamped Edsel – which is probably what they can expect.
Where Is the New Creative Commons of Travel?
You know, Jimmy Wales actually laid the groundwork for all of these “so called” social engagements. Wikipedia was about the power of individual contribution – a superb idealistic concept. And it works too, as does Facebook and a few others. There is a point of departure however. Developmentally, things seem to have been put on hold. The “build it and let the people grow it” principle is still valid – but the “city hall” of social still has to add a park or auditorium once in a while. This is another tangent, but suffice it to say the dollars Expedia earns could easily (and wisely) be invested in growing a better mousetrap – they just aren’t.
Facebook has its limitations, it is not like they are making Expedia dollars yet, so using Microsoft’s investment money like this is necessary. Google has no such restrictions, should they enter the social travel game – but they probably would snap up a contender. The good news for consumers is, these wars always end up providing greater user experience.
Alas though, the speculative goings on of a writer and tech person do not carry so much weight, if they did my mailbox would be full asking for my ideas for online travel – next gen travel value – investing in the core constituency needed. One thing is sure though, big goings on are taking place – with amazingly sparse coverage….
via Facebook Versus Google Travel, the Upcoming Travel Wars.
