Google Finally Takes Off

The friendly skies are about to get interesting.

It's been five months since regulators cleared Google's (Nasdaq: GOOG  ) $700 million purchase of ITA Software, but the world's largest search engine is finally putting the travel software to work.

Google rolled out at a search engine for commercial flights this week, scouring several carriers for the best rates.

After kicking the tires on a few routes this morning at google.com/flights I can't say that I'm terribly impressed. It doesn't seem as good or as intuitive as the comparative engines found at Kayak or even Microsoft's (Nasdaq: MSFT  ) Bing. However, that doesn't mean that traditional travel portals can rest easy.

If Expedia (Nasdaq: EXPE  ) , Orbitz Worldwide (NYSE: OWW  ) , and priceline.com (Nasdaq: PCLN  ) dismiss the threat of Google Flights because of its limited scope and unfamiliar interface, they're missing the bigger picture. Big G remains the search engine of choice, and folks that may begin researching a possible trip through Google -- checking out area attractions, event calendars, and other common sense preludes to booking that just don't appear in traditional travel portals -- will be wooed by the convenience of a flight search within Google itself.

Don't judge Google Flights based on what it looks like right now or the dot-com giant's low-key rollout. Everything boils down to one simple question: At what point does it become more lucrative for Google to serve up direct flight information than to generate a paid click through a lead-seeking travel portal advertiser? It's not just about a single exchange. It's about seeing Google as the starting point of choice the next time that somebody is pondering a travel decision.

It's not just Google catching the flying bug. Baidu (Nasdaq: BIDU  ) , China's largest search engine, snapped up a majority stake in ad-based travel aggregator Qunar earlier this summer. Ctrip.com (Nasdaq: CTRP  ) has every right to be worried in China, just as the stateside portals should be concerned about Google Flights.

Yes, regulators were hesitant in approving the ITA purchase in the first place. The deal didn't go through until Google agreed that it would license ITA's technology to other companies through the next five years. It doesn't matter. If Google can find a way to make itself relevant in travel without diluting its brand for search in general, this lowly launch is going to gain some serious altitude.

You can reach for the airsickness bags now, travel portals.

If you want to follow the traditional travel portals, add priceline.com, Orbitz Worldwide, Expedia, and Ctrip.com International to My Watchlist.

The Motley Fool owns shares of Microsoft, Ctrip.com International, and Google. Motley Fool newsletter services have recommended buying shares of Ctrip.com International, Microsoft, Google, Baidu, and priceline.com. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 14, 2011, at 5:28 PM, PSU69 wrote:

    Have you read In the Plex? Great review of the history and maturing forces inside Goog. I own Goog, have an Android Samsung Galaxy Tab and a BB. I also own Apple. I am pleased they have this travel initiative underway. Hope they hit the ball outta the park. Good for humanity to get the travel deals to the people.

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