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On the surface, Google's (Nasdaq: GOOG ) experiment with placing hotel room rates on its maps is simply an attempt to keep Microsoft (Nasdaq: MSFT ) from stealing too much real estate in the travel business.
Book 'em, Danno!
Bing Travel, for example, already offers a "Book It" feature next to a hotel's location on its maps. While you have to click through to get the prices and complete the transaction, it doubtlessly hasn't hurt Microsoft's ability to grow to an 11.5% share in search, according to comScore. While most of the growth has probably come at the expense of Yahoo! (Nasdaq: YHOO ) , Microsoft's addition of more vertical integration of services into its search tools will make Bing more of a meaningful destination, instead of a list of links.
Google is pushing back by showing travelers the actual price on the search results page, alongside the name of the sponsor offering that rate. So it's not ceding any ground to Microsoft, and both are narrowing the gap between search, e-commerce, and the ads that support them. But is Google also looking to take space from online travel agents and hotels themselves?
The two big OTAs, Expedia (Nasdaq: EXPE ) and priceline.com (Nasdaq: PCLN ) , must feel some hot breath on their necks from the search king. In its latest annual report, priceline was fretting about the growth of Google's City Tours itinerary-generation application, as well as Bing's metasearch capabilities. If either starts sending more traffic to competitor's sites, or directly to the hotels themselves, Expedia and Priceline could feel the pinch.
Price is a big deal ...
But Priceline had to know this was coming sooner or later; it may very well have been part of the reason behind its Big Deal promotion, which expires today. Travelers can see previous winning bids for hotel rooms through Priceline's opaque Name Your Own Price service, and piggyback on the deal without having to put a bid in of their own.
It's always possible that Priceline could extend or revive the promotion, depending on how successful it was. After all, it was the first OTA to "temporarily" cut booking fees, only to end up making those cuts permanent. Relatively recently, both Expedia and Orbitz (NYSE: OWW ) were dragged to the table to make similar cuts. Depending on Google's new price-mapping success, Priceline might need to make some rates less opaque on a permanent basis.
... but does it mean value?
Google's new service is rolling out in a limited way for now, and it only applies for select advertisers. In the example Google provided, priceline and Expedia were two sponsors shown, though one could easily presume Orbitz, Travelocity, or even Travelzoo (Nasdaq: TZOO ) will eventually want to participate as well.
While other services may offer similar features, Google is the go-to map site for the vast majority of users. Being able to book your hotel through the same place you typically go to plan out your itinerary will only ingratiate Google further into our online lives. Room inventory is a tricky matter, and if Google gets it right, online travel agents may have to map out another path to profits.