Google has almost unlimited options when it comes to its future travel strategy. In addition to its huge search traffic and expansive advertising network, Google also possesses an impressive arsenal of technologies that promise not only to change how consumers research and book travel, but how they will interact with their destination once they arrive.
Will Google Labs Cook Up Some Revolutionary New Travel Tools?
Given Google’s massive traffic and advertising reach, it is no wonder Kayak CEO Steve Hafner was recently quoted in Dennis Schaal’s blog, “Google is by far the biggest source of travel information for consumers.” This statement got a lot of people’s attention. Dennis’ follow-up post included a quote from Google’s managing director of travel, Rob Torres, stating “We are not going to copycat. We will only do something if we can do it 10 times better than what’s happening today.” I’m not sure if that helped to calm the fears or feed the terror…
So let’s put this in perspective. In Angry Online Travelers Consider Abandoning The Web, Forrester’s Henry Harteveldt blogged “travelers are so angry with poor online travel experiences they’re approaching a breaking point.” A clearly defined need exists.
Google’s mission statement is: “to organize the world’s information and make it universally accessible and useful.” Organizing travel information aligns perfectly with Google’s mission.
Understanding the “legacy” (Expedia’s word, not mine) online travel companies have largely relied on acquisition to drive strategic product enhancement (see my Online Travel Companies and Travel Technology Innovation post from May,) it is unlikely that game changing advancements will come from the current segment leaders – particularly in light of the present market environment.
This leads to the inevitable conclusion that Google will attempt to radically improve the online travel experience. How? By democratizing travel planning, travel promotion and travel technology development -An approach they have successfully applied and refined with search, advertising, mapping, video, e-mail, and web applications.
Don’t panic. Several months ago, I shouted down the recurring rumor that Google would buy Expedia. There are two primary reasons that Google will NOT suddenly become evil, create an Online Travel Company (OTC) and directly compete with the travel organizations that support it:
- Current Advertising Revenue Streams
- Smart, Strategic Leadership
Instead of confronting and battling the online travel industry at their own game, Google’s path will be more oriented toward developing enabling technologies that make it easier for buyers and sellers of travel to find each other, align priorities, organize options and efficiently enable an appropriate service provider and/or merchant to transact a sale. Here’s why it makes a lot more sense for Google to technologically facilitate travel search and eBusiness instead of trying to control it.
Follow the Money
Comscore’s Top 50 US Web Properties for June 2009 revealed Google captured nearly 157 Million unique visitors compared with a total audience of 194 Million unique visitors. As a point of reference, Expedia, the travel sector’s largest player (and the only travel property making June’s top 50 list) had 27 million unique visitors. In addition to the site traffic, Google’s advertising network weighed in with 84% reach and 162 million unique visitors, but that excludes ads running on Google itself (77%/149 mil) and YouTube (47%/92 mil.)
Google’s advertising platform efficiently sources the advertising messages (Adwords) from travel sellers and distributes it through its distribution network (AdSense) allowing publishers to share in the advertising revenue. Google has also integrated DoubleClick and its large ad management platform, acquired last year. For example, DoubleClick and AdSense now share a single tracking cookie. With this massive scale, and a 6x advantage in unique visitors compared to travel sector leader Expedia, there is little need for Google to enter the lower margin OTC business space, create conflict and potentially impair an important advertising revenue stream.
Google’s advertising reach is already pervasive throughout the travel industry, with Google sourced ads even appearing on leading OTC and meta-search sites like Expedia and Kayak. With its ad distribution network now established, it is much more profitable for Google to leverage ad products to target & serve incremental travel ads, while the inventory acquisition, pricing, content management, transaction processing, merchant services and customer care can be left to others willing to accept the higher operating costs and lower margins.
Leadership resisting the temptation to become evil
Google is managed very differently from travel industry organizations; it starts, for example, with Google’s corporate motto “Don’t be evil.” After a decade of revolutionizing the web, Sergey Brin, Larry Page and Eric Schmidt clearly understand the cyber-ecosystem from their position at the top of the food chain. Typically, they don’t attack and deplete that food chain, they normally figure out ways to grow it and make it more efficient.
Google is famous for its lists of guiding principles. Perhaps the best way to predict their online travel strategy is to look at not only the Google company philosophy, but also its approach to innovation, product design, technology development and marketing:
Google’s Corporate Philosophy
- Focus on the user and all else will follow.
- It’s best to do one thing really, really well.
- Fast is better than slow.
- Democracy on the web works.
- You don’t need to be at your desk to need an answer.
- You can make money without doing evil.
- There is always more information out there.
- The need for information crosses all borders.
- You can be serious without a suit
- Great just isn’t good enough.
Google Design Principles
- Focus on people—their lives, their work, their dreams.
- Every millisecond counts.
- Simplicity is powerful.
- Engage beginners and attract experts.
- Dare to innovate.
- Design for the world.
- Plan for today’s and tomorrow’s business.
- Delight the eye without distracting the mind.
- Be worthy of people’s trust.
- Add a human touch.
Google Innovation Principles
- Innovation, not instant perfection.
- Share everything you can.
- You’re brilliant, we’re hiring.
- Allow employees to pursue their dreams.
- Ideas come from everywhere.
- Don’t politic – use data.
- Creativity loves restraint.
- Get users and usage – the money will follow.
- Don’t kill projects, morph them.
Google’s Development Principles
- There aren’t really any rules.
- Customer safety and happiness is #1.
- It’s only code – We can change it.
- We all work for the same company.
- Networks are infinitely configurable.
- No “Policy” discussions.
- No “Working”
- Computers will only break your heart.
Principles of Google Marketing
- Results must be trackable
- Promote trial.
- Let others speak for you.
- Data. Not hype.
- You’re smart. And your time matters.
- We’re serious. Except when we’re not.
- Big ideas move us.
If Google abides by these pronouncements, it would seem that they would be able to revolutionize online travel. This does not mean the process will be fast, easy, or that they will even get it right on the first attempt. Google’s mobile strategies are focused on supporting people when they venture away from home and office, so travel not only provides the perfect laboratory for innovation, but a global industry with opportunities for monetizing successful development efforts. The online travel space can help Google tactically leverage its current product portfolio while they pursue larger strategic initiatives and development opportunities.
There is tremendous benefit to the travel industry – travel buyers and sellers alike – for Google to revolutionize the online travel experience. That translates into greater revenue and profit potential not only for Google, but for travel suppliers, destinations, and especially, nimble travel sellers. By embracing standards and the open source development community, Google’s business model also ensures that the platforms and technologies Google develops will benefit from innovative enhancement through creative individuals or enlightened crowd-sourced communities. This should help Google keep pace with the diverse and changing needs of the global travel community.
My money says that Google’s travel strategy will continue to rely on its core principles and the “Don’t be Evil” credo. Current online travel processes and policies that sacrifice user experience, add unnecessary complexity or stifle innovation will be their initial target.
Google’s deeper focus on the travel industry will raise the bar for travel technology developers, online travel companies and travel suppliers. As a result, the travel industry will benefit from this technological evolution. It will be the travel industry’s responsibility to step up and embrace the opportunities presented by Google’s technological enhancements – even the revolutionary 10x ones. Online travel sellers that quickly adapt to the opportunities presented by new tools will benefit from a first-mover advantage. On the downside, those that don’t adapt or contribute value, like the defunct brick & mortar travel agents that served solely as order-takers, will run the risk of disintermediation. Based on Henry Hartesveldt’s research, it does not look like many travelers would miss an online travel player that falls too far behind.
In an 8-part series, I will investigate ways Google can dramatically support the travel industry by producing the tools required by travelers, suppliers, destinations and online travel companies to enhance competition and commerce – and generate profit for Google in the process. The series breaks the travel process into seven phases – Inspiration, Research, Planning, Validation, Booking, Travel and Sharing. Each post will highlight an aspect and explore the tools Google currently provides and suggests some potential enhancement.
- How Google Can Help Revolutionize Online Travel – August 18, 2009
About Robert Cole
