Google's Flight Search Ruffles Feathers

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Google best ticket pricesOnline travel websites aren't happy with Google's (GOOG) latest move.

Earlier this month, the world's leading search engine began pushing its own flight search feature ahead of other organic results.

Punch in "MIA to LGA" in a Google box, and the first thing you'll see (after a shaded box of sponsored search results) is Big G's own comparison engine doling out the cheapest airfares across available airline carriers.

It's after the ads and the Google flight search option that third-party providers including Expedia (EXPE), Orbitz Worldwide (OWW), and fellow rate aggregator Kayak.com appear organically. Being bumped lower on the first page of the search giant's results will probably result in lower traffic for the established online travel websites -- and they're naturally not happy about that.

Google Planned This Trip

When antitrust regulators and a federal judge cleared Google's $700 million purchase of ITA Software earlier this year, it was really just a matter of time before this happened. Why else would the dot-com darling have spent so much to secure a leader in flight-search data?

Google search engine

Consumers are unlikely to mind. No one types in a pair of airport codes unless they want to see what flight options are available, and Google is making it more convenient to get to the information they crave.

Airlines are outright loving this move. Google flight searches link directly to the carriers, saving them the need to pay Expedia, Orbitz, and other travel websites chunky commissions for leads that translate into bookings.

Expedia may have been around for ages as an online travel pioneer -- and Kayak has been scouring available travel-related rates for years -- but Google's move is evolutionary. Legacy carriers that have historically struggled with sustainable profitability now have a more cost-effective path to secure bookings, and passengers won't complain if this grants airlines the flexibility to perhaps even lower their rates.

Everybody wins, except for the travel websites, but don't expect that to silence the accusations that Google has turned into a bully.

Goliath v. 2.0

Google's "Don't be evil" mantra has been tested over the years. It has been kind to the search results of Wikipedia, even though the perpetually updated nature of the public encyclopedia makes it a shaky resource. Wikipedia's refusal to carry advertising also means that Google may be denying traffic to some of its partner sites that pair up content with Google's contextual marketing ads.

However, now Google is ready to be more than just Mr. Nice Guy; in fact, Big G just might be ready to be Microsoft (MSFT), which famously took advantage of its popularity as an operating system provider to push its Internet browser, media player, and even Office suite of productivity programs on users.

Is Google now ready to take a more active role in cashing in as the search engine of choice throughout most of the world? Online travel websites will complain. They are now being forced to advertise on Google, and to pay enough to be one of the top three marketers to show up ahead of Google's search flight box as sponsored search results.

Is that fair? Has Google gone too far? Is this simply a matter of Google being financially smart enough to take advantage of its pole position in search?

Folks will complain, but in the meantime, I'm off to Google to start researching my next getaway.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Microsoft and Google. Motley Fool newsletter services have recommended buying shares of Google and Microsoft as well as creating a bull call spread position in Microsoft.


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6 Comments

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Debbie

Didn't work for me when I just tried it. Expedia was th first thing to come up below the sponsored ad

December 28 2011 at 1:29 PM Report abuse -1 rate up rate down Reply
mmplv73

Well isn't that ironic. The travel websites complain about this movement into their territory and thus taking revenue from them. However, the same travel websites found no reason to pay the room and other taxes imposed on room reservations in Las Vegas. If this Google website helps people book directly with airlines and the hotels and the results are that the taxes due on flights and hotels get paid I suppose that is actually a better deal for the of society. If Google is offering jet another source to book flights through then this would increase the number of internet hotel and flight booking sites thus forcing this industry away from monopolization. It doesn't bother me one bit at all.

December 28 2011 at 1:09 PM Report abuse +1 rate up rate down Reply
pozboys

The consumer cares about just a few important things! First, does the ease of comparison shopping, for the best rates, make things easier? Second, will it be easy to get the advertise cheaper rate, without going through hoops, to secure that advertised price? That's all people want, the easiest way, to get the best price! Bouncing around to different sites, gets old after awhile, as does finding out that "that price does not apply," for your time frame, or travel destinations! We all are getting smarter, about all the games, but they still manage to get you, occasionally !

December 28 2011 at 11:57 AM Report abuse rate up rate down Reply
Mike

I will NOT FLY until big govt is out of the air line business! Not my money!

December 28 2011 at 11:47 AM Report abuse -2 rate up rate down Reply
1 reply to Mike's comment
Lifterguy

Big Govt is in the airline business? News to me. Where do I go to buy my ticket on US Government Airways?

December 28 2011 at 12:51 PM Report abuse +2 rate up rate down Reply
dontcopyit

Google has so much power.... it just depends how we use it.

December 28 2011 at 10:46 AM Report abuse rate up rate down Reply