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Could ‘Troogle’ Spell Trouble?

July 15, 2010 By: Michael Browne

It seems as though not a week goes by where you’re not hearing about some new threat to your business from the Internet, only to be followed by comforting words about how that threat is really an opportunity. If nothing else, it keeps you on your toes.

Still, the announcement that Google plans to acquire ITA Software in an all-cash deal for $700 million does merit some concern on the part of travel agents. ITA, based in Cambridge, MA, is a provider of software that is used to organize flight information. Its Needlebase software, which allows users to acquire and sort through data from multiple sources, is likely to level the playing field. The potential partnering with search powerhouse Google could create a powerful force in the travel sector—a segment that Google has yet to really conquer. (Interestingly, Google’s travel offerings probably compete most directly with Microsoft’s Bing—which, up until now, has used ITA.)

Not surprisingly, there is an industrywide fear of the emergence of “Troogle”—travel Google—particularly if the company subsequently adds a hotel search function.  Trying to calm the storm of reaction from online travel agents such as Expedia (whose chairman Barry Diller called the merger “disturbing” and raised the question of antitrust laws), Google released a statement saying that it is still too early in the acquisition process to say exactly what new products or services the company intends to roll out. Google went on to say that the deal is not in violation of antitrust law because it is not setting prices, selling airline tickets, shutting out the competition or altering the market-share environment.

So should you, the home-based travel agent, be worried? It’s hard to say—every time one of these Internet giants moves into the travel sector, it tends to make it easier for consumers to book their own travel. But then nature and circumstances arise (volcanic ash, airline strikes) that send people running back to travel agents. Common sense says that Google will be getting into the booking business at some point—the size of the investment indicates that the company is looking for a significant payoff down the road. But how long that road is, and exactly where it leads are questions that the travel industry will just have to wait to see answered.

And when  it is answered, hopefully I’ll be writing those comforting words about what an opportunity this is for agents.

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