Saturday, July 03, 2010

Analysts’ Views: How Will Google Shake Up Online Travel? - Digits - WSJ

Disintermediation 2.0

In the long run, though, online travel agencies could face a problem — not just from Google but from other meta-search engines like Bing. The entry of the Google juggernaut might just accelerate the trends. These meta-search engines do provide online travel agencies with more leads, but they increasingly direct consumers to airline and hotel sites instead, and this could eventually cut into margins for the travel agencies, Mr. Olson writes.

Of course, all of this assumes that the Google-ITA deal will make it past regulators. Analysts expect considerable scrutiny of the deal, and Google already has gone on the offensive, emphasizing that it plans to continue ITA’s contracts and that customers like Kayak have options other than ITA for flight data. But “some industry participants will likely try to disrupt the transaction,” writes Justin Post at Bank of America Merrill Lynch — just another sign of concerns these businesses have over Google’s entry.

Analysts’ Views: How Will Google Shake Up Online Travel? - Digits - WSJ

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