Google Search Shows Flight Schedules: Kayak & Others Safe for Now
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 (NASDAQ:EXPE) and Priceline (NASDAQ:PCLN).
We value Kayak, still a private company, at $802 million 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.
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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 Concerning.One such move was Kayak recently partnering with Travelocity to provide hotel bookings on its own website. See Kayak Partners with Travelocity but Benefits Unclear.