Travel related searches got a big boost with Google
(NASDAQ:GOOG) recently adding flight schedules to its search
results. While the search result shows both the times and airlines
under "schedule of non-stop flights", there is no airfare or seat
availability listed. However, links are included that point to
airlines' websites here the user can proceed to make
bookings. Here we explore what impact Google's recent move could
have on a travel data provider like Kayak, and eventually on online
travel agency websites like Expedia (
) and Priceline (NASDAQ:PCLN).
We value Kayak, still a private company, at
and believe Google's recent move could have a negligible impact, if
any, on Kayak in the near-term.
Kayak is a travel search company that aggregates travel data
(schedules, availability, fares) from hundreds of travel websites
(both travel suppliers such as hotel chains and airlines, and
third-party online travel agencies) and facilitates quick and easy
comparison of fares through its website and mobile applications.
Kayak does not offer air ticket bookings at its own website but
merely directs the user to the selected travel supplier's or online
travel agency's website to complete the purchase.
Why no impact on Kayak for now
Google's search result doesn't disclose prices. Kayak not only
discloses prices but also enables comparison of the prices
available at the innumerable sources online. Leisure travelers
looking for the 'best prices' will still find Kayak a more relevant
source than Google Search. However bets are off if prices start
appearing in the Google search result.
What threat lies ahead for Kayak?
The added functionality is only the beginning for Google. Post
Google's $700 million acquisition of ITA Software, a company that
organizes airline data in April 2011, we expect to see much more
from Google in travel searches going forward.
So while Kayak can breathe easy for now, it as well as other
online travel agencies like Expedia and Priceline must well be
prepared to adapt its business to a more sophisticated travel
search on Google. See
Kayak Worth $800 million Though Google-ITA Deal Is
.One such move was Kayak recently partnering with Travelocity to
provide hotel bookings on its own website. See
Kayak Partners with Travelocity but Benefits
View our detailed analysis for Kayak