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What the Google-ITA Deal Really Portends

kdawson posted more than 3 years ago | from the this-price-just-for-you dept.

Transportation 77

Much of the discussion about Google's bid to buy ITA Software, including here, has been limited by the lack of understanding all around about how airline search and reservations actually work now, and what it is exactly that ITA Software does. Travel expert Edward Hasbrouck wrote a detailed 3-part piece on his blog explaining the back story, what ITA Software does, and what it means for travelers. "...because CRS/GDS [Computerized Reservation Systems or Global Distribution Systems] companies are generally invisible in their intermediary role (and currently all owned by groups of private equity investors, so they need not report publicly on their finances or operations), few analysts outside the travel tech industry know how to interpret the implications of Google's decision to invest $700 million in this sector. Frankly, I'm not at all sure Google itself understands what ITA Software does (and doesn't) do, and what they are getting for their money. ... What will this deal mean for travelers? The short answer is that it is likely to be a bad thing for travelers ... because it is likely to exacerbate the trend toward personalized and less transparent pricing of airline tickets (and other travel services) and the de facto disappearance of key consumer protection principles embodied in the definition of a common carrier and the requirement for a published tariff applicable equally to all would-be customers complying with the same rules."

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77 comments

IT reporting? (3, Interesting)

Nargg (1678106) | more than 3 years ago | (#32967718)

Is it me, or is everything reported that is IT related these days a conspiracy? LOL! Actually, this story was informative and helpful. It could have done without all the pretense though.

Re:IT reporting? (0)

Anonymous Coward | more than 3 years ago | (#32967912)

The real outcome of all this is targeted tray-table ads. Luckily a blocker technology already exists: http://en.wikipedia.org/wiki/Electrical_tape

Re:IT reporting? (1)

LostCluster (625375) | more than 3 years ago | (#32967966)

I remember debating in college a professor who thought that Microsoft's MSN was going to be a single-sign-on takeover of the Internet, and I had to point out that nearly everything offered by MSN at the time were also duplicated by Yahoo! or AOL Time Warner who also offered their own single-sign-on interface, and in some product areas the competitors were using the absolute same backend services.

Google is now the "too big to leave alone" player... but seemlingly everything they do is something that there is a competitor for, it's just that Google is #1 for being the best.

Re:IT reporting? (1)

digitig (1056110) | more than 3 years ago | (#32968000)

Is it me, or is everything reported that is IT related these days a conspiracy?.

Damn. He's on to us. Time to change plan, guys.

Re:IT reporting? (3, Informative)

jdgeorge (18767) | more than 3 years ago | (#32968154)

this story [...] could have done without all the pretense though.

No, I think the pretense is part of his brand. This guy, who apparently is a travel aficionado and a devoted travel privacy activist, is perhaps even more significantly a master of self-promotion. The only useful information about him is provided on his own blog (the bio linked from the summary), which does a fantastic job enumerating the various rippling waters that Edward Hasbrouck evidently walks upon.

I'd be repelled except that he really seems to know his stuff.

Re:IT reporting? (1, Interesting)

Anonymous Coward | more than 3 years ago | (#32970228)

Unfortunately so. The Practical Nomad is an awesome book.

Just because you think... (1)

Lead Butthead (321013) | more than 3 years ago | (#32972910)

Is it me, or is everything reported that is IT related these days a conspiracy?

Just because you think they're not out to get you, doesn't mean it's true. Technological development has ran rampantly unchecked for some time; as evident by erosion of personal privacy and rights.

It's just a database... (4, Informative)

LostCluster (625375) | more than 3 years ago | (#32967808)

ITA Software's main business is taking the various fare/schedule tables put out by the airlines, and then combine and standardize them so they're comparable, and finally put a user interface on top of all of this so the average user can figure out what their options are for getting from Airport A to Airport B during the time frame the user was interested in.

They're not a travel reservation system... although some of their customers add that themselves to ITA's flight selection tools. Google already has some simple flight tracking tools in their interface, and Bing has been trying to sell their "Decision Engine" as a tool for selecting flights and predicting fare movement, so this seems like a natural acquisition to add to Google.

Re:It's just a database... (1)

GNUALMAFUERTE (697061) | more than 3 years ago | (#32967902)

Not only that, this is precisely the kind of problem good is good at solving. If there is one company that can do this better, faster, and easier to integrate, complete with a well documented SDK, it is Google.

The submitard tried to make ITA look more complex or important that it really is.

Re:It's just a database... (1)

GNUALMAFUERTE (697061) | more than 3 years ago | (#32967930)

<quote>the kind of problem good is good at solving</quote>

I am an asshole. s/good/google/

Re:It's just a database... (0)

Anonymous Coward | more than 3 years ago | (#32968046)

<quote>the kind of problem good is good at solving</quote>

I am an asshole. s/good/google/

<quote>the kind of problem google is google at solving

Re:It's just a database... (3, Insightful)

pedantic bore (740196) | more than 3 years ago | (#32968152)

No, he didn't put a 'g' on the end, so it only matches the first...

Re:It's just a database... (1)

Thinboy00 (1190815) | more than 3 years ago | (#32969096)

You're the only one who got modded up for your reply, and that's probably because of your user name.

Re:It's just a database... (1)

pedantic bore (740196) | more than 3 years ago | (#32969468)

Well, maybe it was because I was first.

The user name is a mixed blessing. Whenever I make a speling error, I get all sorst of flak.

Re:It's just a database... (0)

Anonymous Coward | more than 3 years ago | (#32972170)

+1 Funny

Re:It's just a database... (0)

Anonymous Coward | more than 3 years ago | (#32968162)

no, s/good/google was right, it only replaces the first google, its not s/good/google/g

Re:It's just a database... (0)

Anonymous Coward | more than 3 years ago | (#32969030)

He didn't say s/good/google/g dumbass

Re:It's just a database... (4, Interesting)

Daetrin (576516) | more than 3 years ago | (#32968202)

"and Bing has been trying to sell their "Decision Engine" as a tool for selecting flights and predicting fare movement, so this seems like a natural acquisition to add to Google."

To be fair(?) this wasn't Bing/Microsoft's idea originally. As is so frequently the case it seems, a website called Farecast [wikipedia.org] came up with the idea of basically aggregating the aggregators (which isn't a big idea in itself) and using that information to predict future flight prices (which is, IMHO.) It was incredibly useful, and when Microsoft realized that they bought out the company and merged it into Bing. I used Farecast before the buyout and now it's the only thing i use Bing for, since as far as i'm aware no one else has implemented the idea. (If i'm mistaken about that then someone please inform me of the alternatives.) If this acquisition means Google is thinking about doing the same thing, then great!

"Decision Engine" (0)

Anonymous Coward | more than 3 years ago | (#32969208)

Speaking of Bing, does anybody else think that its proud self-label as a "decision engine" is highly pretentious? People rather often want someone or something else to tell them what they should do, but it seems to me that in many of these cases, they don't realize this and may be offended by the suggestion that they don't know or don't care what's best for them?

But hey, it's not my money, and I don't use the service.

Re:"Decision Engine" (1)

GameboyRMH (1153867) | more than 3 years ago | (#32973808)

I find it a huge turn-off. I don't want a decision engine, I want a search engine, and then I'll decide for myself.

Re:It's just a database... (0)

Anonymous Coward | more than 3 years ago | (#32969872)

waite, agregating agregates? future prices? isn't this the sort of witchcraft that caused the ressesion?

Re:It's just a database... (1)

stephanruby (542433) | more than 3 years ago | (#32975006)

waite, agregating agregates? future prices? isn't this the sort of witchcraft that caused the ressesion?

Not really, there is no leverage involved. If you make a mistake predicting a price and can't pay for the new price for whatever reason, you just don't fly (or you try to fly on a different date).

I guess a travel agency or an airline of some kind could try to pre-purchase tickets to resell at a later date, or to farm it out to other airlines, but Farecast wasn't designed for that purpose, Farecast was designed with the consumer in mind.

Re:It's just a database... (2, Interesting)

rsborg (111459) | more than 3 years ago | (#32969944)

It was incredibly useful

Perhaps for you, but for me, I relied on it (it said prices would go down) and lost a great fare once (spent about 10% more overnight per ticket), and never trusted it again. An impressive looking technology (forecasting fare prices) sounds great until you attempt to rely on it. What did save me money was using farecast and kayak's daily email update. Kayak specifically mentions how many fares are left at that price.

Re:It's just a database... (2, Interesting)

stephanruby (542433) | more than 3 years ago | (#32972084)

I used Farecast before the buyout...

From your conclusions, I'm really having a hard time believing you. I also tried using Farecast from the time the 'Super Crunchers' book came out and before the time Microsoft purchased the company. And just like you, I was totally gung-ho about the concept and the startup company. And if someone had approached me just after reading the 'Super Crunchers' book, I would have easily invested everything I owned in that startup, I was so totally and utterly convinced by the arguments the author was making.

And by the way, I'm still convinced by his arguments, so don't take this as a complete opinion reversal. It's just that his choice of the Farecast example, as elegant and as perfect it looked on paper, didn't work for me at all in practice. The Farecast engine couldn't even get most of the current prices from the airlines it had listed on there. And as good as its prediction engine may have been, I will never know, but if the data coming in was only garbage-in to begin with, it doesn't matter how good the prediction engine is or was, the data coming out was most probably just garbage-out.

And for all I know, Microsoft may have solved that problem by taking it over (I haven't checked yet). To me at the time, it appeared that the airlines were deliberately obfuscating the data to the Farecast engine. So in that respect, Microsoft probably has a much better chance to get to that data. I can definitely see airlines blacklisting and messing with the bots or the scrapers of a small no-name start-up which is trying to circumvent their pricing schemes, but I think it would be a much harder decision to blacklist and mess around with the search bots from Microsoft, without getting yourself de-listed from Bing or Expedia at the same time, so in that respect, I'm much more hopeful that it works now under Microsoft (it's just that when I tried it, and I tried it several times, it really didn't work any of those times).

Re:It's just a database... (1)

icebike (68054) | more than 3 years ago | (#32972190)

And that is precisely why the hype and doom scenario in this story is utterly silly.

Does the fact that I can search for and buy something with Google checkout, absolve either the seller or the shipper or the credit card companies of their respective obligations under the law?

Its just an information service. Yes, they will probably add ticketing, hotel reservations, car rental somewhere along the way. Bring it on! If anything, Google would be more forthcoming about hidden fees and costs than the travel industry.

Federal regulators are already starting to make noise about cracking down on the nickel-and-dime fees which often double the ticket price, and nothing could be more welcome. And those regulations would apply to Google's service as well.

The summary argues that ticket-sales by obscurity, obfuscation and legwork is better than than being able to pick from a list or a customized list tailored to the individual.

I get better service from Google than my Airline. Google never lost my bag or bumped me from a flight booked months in advance.

Re:It's just a database... (1)

mgblst (80109) | more than 3 years ago | (#32974312)

ITA Software's main business is taking the various fare/schedule tables put out by the airlines
WRONG There is no fair/schedule put out by airlines. What they do is try to create a fair/schedule themselves, by constantly quering the airlines databases, which costs them money each time they do it.

read the articles, they are incredibly interesting.

It's a little 'the sky is falling' (4, Informative)

Mongoose Disciple (722373) | more than 3 years ago | (#32967974)

I wouldn't consider myself an expert on this issue, but I have done a few years of development work for the travel industry in the past, including direct interface with the GDSs (basically, the central systems such as Worldspan or Sabre which provide airfare pricing/availability information for the flights on most airlines). The article (probably unintentionally) misses a few important things:

1) ITA's software is, by far, not the only way to get at the flight/reservation information from the GDSs. So, yeah, maybe Google has the power to analyze your data and say, "Hmmm... this guy just bought a luxury car, I'm going to mark up all the flights I offer him by an extra $100", but there still will be a bunch of other people willing to sell it to you for something closer to the "real" price.

2) Some carriers opt out of the GDS system entirely. For example, as far as I know, Southwest is still opting out of it, which is why you typically can't find Southwest flights for sale on most travel sites. There are some big advantages to being part of the GDS system, mainly in that it puts your product out for sale in a lot more venues -- but even if all the providers of GDS data somehow colluded to artificially raise fares, it would only make the fares of non-GDS airlines even mroe attractive.

I'm not someone who believes in the power of the free market to solve all problems, but in this case, barring the growth of some kind of ridiculous super-monopoly that the government would almost certainly break up, it really can correct for almost any kind of insidiousness on the part of Google or anyone else that I can imagine.

Re:It's a little 'the sky is falling' (3, Funny)

bberens (965711) | more than 3 years ago | (#32968142)

I doubt it will be "This guy bought a luxury vehicle, so charge him $100 more." It will probably be more like "This guy just bought a luxury vehicle, let's slightly alter the user interface so he sees the first class seats more easily."

Re:It's a little 'the sky is falling' (1)

Thinboy00 (1190815) | more than 3 years ago | (#32969156)

When you're talking about airline flights there is no "real" price (thanks to rampant price discrimination).

Re:It's a little 'the sky is falling' (2, Informative)

LostCluster (625375) | more than 3 years ago | (#32969916)

Southwest, JetBlue, and others of the low-price carriers opt out of letting anybody other than themseleves sell their tickets, but they still have to register their flight times and fares with the government, meaning ITAsoftware.com's version of the platform can still display those flights (and tell you where to go should you want to book one), but the travel agency customers of ITA don't display what they can't sell you. Hopefully Google will continue to offer the "unbiased" edition of the software, and mix in a Google Checkout way of buying what they are able to sell through the system.

Re:It's a little 'the sky is falling' (1)

dpalley (670276) | more than 3 years ago | (#32972646)

Southwest and JetBlue are both available via the Sabre GDS. (I work for Sabre).

Re:It's a little 'the sky is falling' (1)

Mongoose Disciple (722373) | more than 3 years ago | (#32976762)

Huh. I don't doubt you, but I'm surprised to hear it. Out of curiousity, do you have any idea when that happened?

(I've been out of travel for a few years now, so I'm not as informed anymore as I could be.)

Re:It's a little 'the sky is falling' (1)

rickla (641376) | more than 3 years ago | (#32973888)

ITA has some stuff that will surprise you, I can't say what it is but I certainly am not surprised google wanted it. It will blow you away, those guys know what they're doing and it's far nicer to work with than sabre that's for sure.

Sometimes People Say More Than They Mean To (-1, Flamebait)

Anonymous Coward | more than 3 years ago | (#32968038)

As Dr Johnson almost said, a black intellectual is like a dog walking on its hind legs: it’s not done well, but you’re surprised to find it done at all. One of Britain’s most prominent black intellectuals is Trevor Phillips, the Chair of the Commission for Triangular Squares and Flying Pigs – better known as the Commission for Racial Equality. If Phillips’ intelligence matched his self-regard and self-righteousness, he’d be pushing back the frontiers of physics or computer science somewhere. But he’s black and it doesn’t, which means that he sometimes says more than he means to.

He recently wrote an article for The Independent, one of Britain’s two big liberal newspapers, arguing for the economic benefits of mass immigration and describing a recent trip he had made to the United States and Canada. One city he visited was failing, another was flourishing, and he explained the difference using immigration. The failing city hadn’t been blessed by it, the flourishing city had. This is how he put it – see if you can spot the blatantly racist conclusion he drew without realizing it:

Immigration in North America is really about economics. I spent much of last week there, starting on the banks of the Mississippi. In the small, African-American district of East St Louis, the only businesses that thrive are fast-food outlets and beauty parlours; the tax base is so low that 80 per cent of the city’s education spending comes from federal handouts. By contrast the city in which I ended my trip, Vancouver, lies at the heart of a dazzling growth surge in western Canada. One thing above all accounts for the transformation of this Pacific coast backwater into an economic success story: immigration. Nearly half of those who live in the city centre are immigrants, among them over 300,000 Chinese and 200,000 Indians.

Did you spot it? That’s right: Trevor Phillips, black head of the British Commission for Racial Equality, was complaining in one of Britain’s big liberal newspapers about lazy, dumb, good-fer-nothing niggers. A city with lots of blacks fails, because blacks are lazy and stupid and just want to fill their guts fast and look good so they can get sex. But a city with lots of Chinese and Indians flourishes, according to Phillips, because they’re clever and materialistic and work hard for themselves and for their children. And what would happen if East St Louis got lots of Chinese and Indian immigrants? The blacks would still be lazy and stupid, but now they’d have two new groups to feel envy and resentment towards, and two new groups would learn to hate and despise blacks. Something similar will already be happening in Canada: Vancouver’s surface glitter will hide a lot of racial tension, and when that glitter fades, as it inevitably will, the racial tension is going to turn nasty.

That’s a part of why White nations don’t need Chinese and Indian immigrants. Even if they “help the economy” in the short term, it’s better to be poor and racially healthy than rich and racially diseased. We can survive on our own; we cannot survive in company with other races. What Phillips and other blacks are asking us to do is build our own funeral pyre, soak it in kerosene, and then hand them the matches. Phillips & Co are on the funeral pyre too and they’re going to go up with us when they strike the match, but they’re dumb niggers and don’t quite get that part.

The people pulling their strings aren’t dumb though. White nations never voted for mass immigration and with the exception of greedy, selfish businessmen, never wanted it. Only the small Jewish minority wanted it, but Jews aren’t stupid and they got what they wanted.

You can see them regularly gloating over their success in The Independent and The Guardian, the other big liberal paper in Britain. In the latter, one David Aaronovitch wrote of “the Joys of Diversity” and how he prefers the “quiet, paper-reading ethnicities” of his train-journey to work to the “exotic, incomprehensible” White racists of northern England, where the chickens of Muslim immigration are now coming home to roost. Another Jewish columnist on The Guardian, Jonathan Freedland, recently spent a month in South Africa. He’d campaigned hard during the 1980s to overthrow apartheid, and was naturally eager to see the fruits of his labors.

Alas, he didn’t find things in South Africa quite as rosy as he’d hoped and on his return to Britain he wrote a column saying so. But Freedland wasn’t worried about South Africa’s horrendous crime rate: the thousands of rapes and murders committed every year by lawless blacks against Whites and against each other. He wasn’t worried about the AIDS epidemic there, caused by black promiscuity and black stupidity. He wasn’t worried about corrupt black politicians cheating their own people and blaming all their problems on the legacy of apartheid. No, Freedland wasn’t worried about any of that. The burning question that occupied him during his stay in South Africa was this:

Would I see, at any point in nearly four weeks in the country, a white person serving a black person? I looked hard – at restaurants, at petrol stations, in bars, in shops, in banks. I never saw it. Not once. I looked at magazine covers and window-displays in clothing stores. White, white, white. Occasionally, there would be a token black face, usually very light-skinned.

“White, white, white,” wails Jew Freedland. Bad, bad, bad. But thanks to him and his fellow Jews, things are looking better and better in the formerly White nations of the world every day. Better for Jews, that is. For Whites, things are looking worse and worse, and they’re not going to look better again until We Get Rid of the Yid.

atpco (-1)

Anonymous Coward | more than 3 years ago | (#32968136)

i think the people over at ATPCO are scurred

Even google doesn't know what ITA does? Really? (3, Interesting)

teshuvah (831969) | more than 3 years ago | (#32968488)

Do these people even think before they type? Do they really think google would spend $700 million on something that they have no idea what it really does?

Re:Even google doesn't know what ITA does? Really? (1)

F34nor (321515) | more than 3 years ago | (#32972020)

All ITA does is find palindromic pan-grams, nothing to see here, move along.

Re:Even google doesn't know what ITA does? Really? (1)

DerekLyons (302214) | more than 3 years ago | (#32982926)

Given Google's history of purchasing companies and leaving them wither on the vine, developing ideas and then not following through to completion, and generally acting like it has the attention span of an easily distracted five year old... It's easy to believe that Google would spend $700 million on something they don't really understand. They see it as a search-and-aggregation engine, and that's pure catnip to Google.

How ITA's software works in the back-end (5, Informative)

Anonymous Coward | more than 3 years ago | (#32968588)

Posting anonymously as I work for an airline and wrote a fair bit of the code which keeps ITA's software in realtime.

ITA's core product is a fares shopping engine. Basically, as laid out in the blog posts, the price you pay for your seat is a function of an airline's published fare for a particular "fare class" (there are 26 fare classes per flight in the SABRE GDS, with about 21 functional) and the willingness of the airline to sell you a seat in that class (due to seat allocation). So what happens is that as seats are purchased in real-time, ITA's software must get an update from the airline in real-time so that it constantly knows whether a particular fare is still available to be purchased. Otherwise, the fare you are presented would be rejected by the GDS when you attempt to make your purchase.

This real-time querying is a huge coordinated effort between the airlines and ITA, which basic functionality being that the airline will publish fares to ITA nightly (with push adjustments to these fares as airline analysts make changes throughout the day) and real-time seats sold information, with all information flowing as compressed XML via standard messaging protocols.

Obviously in a scenario like this, there is momentary lack of synchronization between the GDS and ITA's shopping engine, and in these windows exist the possibility for a failed booking as the GDS deems a class non-sellable but ITA's database has yet to receive the pushed data. The major goal of ITA and the airlines in this scenario is to reduce the booking failure rate to 0%, which is of course unattainable, but each percentage point north of this counts as major lost revenue to the airlines. Anything north of 5% booking failures is considered unacceptable and generally sends the rats scurrying in attempts to resolve the synchronization issues.

Re:How ITA's software works in the back-end (1)

Civil_Disobedient (261825) | more than 3 years ago | (#32972942)

with all information flowing as compressed XML via standard messaging protocols

Not that an anonymous coward would watch their own post, but just in case... what "standard messaging protocols" were they using, out of curiosity? Personal guess is JMS.

Re:How ITA's software works in the back-end (0)

Anonymous Coward | more than 3 years ago | (#32975000)

with all information flowing as compressed XML via standard messaging protocols

Not that an anonymous coward would watch their own post, but just in case... what "standard messaging protocols" were they using, out of curiosity? Personal guess is JMS.

ITA Software is known for two things: their intensive hiring process in which they seek the best and the brightest (in stark contrast to the majority of their industry) and their use of Lisp (again, stark contrast). Now combine that with the fact that the airline industry's use of computers for inventory automation is one of the very earliest success stories of computers in industry (circa 1960s). Which of those two camps do you think would be enthralled with Java-based messaging protocols in an environment where, according to the grandparent poster, performance is all-important?

Just askin.

Re:How ITA's software works in the back-end (1)

yuhong (1378501) | more than 3 years ago | (#32973086)

Posting anonymously as I work for an airline and wrote a fair bit of the code which keeps ITA's software in realtime.

Personally, I would post non-anonymously whatever possible, even in situations like this. But posting anonymously is still OK.

Re:How ITA's software works in the back-end (0)

Anonymous Coward | more than 3 years ago | (#32973320)

huge coordinated effort between the airlines and ITA

Ok, so my question would be: Where is the problem with this? Honest question. Of course there is a window, but I can't imagine, that the problematic part is GDS/ITA communicating. Let's say I want to book a flight from A to B. So, I enter search criteria and the booking website tells me I can get it for $X, in a big list with other airlines etc. Looking at this takes some time. Then I go talk to my wife about it etc. Lets say that takes a minute or two. Plenty of time for someone else to buy the last ticket in that class and when I try to book it tells me it can't be booked any more.

But where is the "huge coordinated effort"? Yeah, great, as the database at airline X, Y and Z changes, those changes are replicated to ITA. A lot of people do that. I worked on a database system where people would query read-only replicates of our data. _All_ replicates were updated in real-time (yes, as in, more than one). All of that running on a bunch of Sybase servers located around the world for fast querying. However, again, where is the big effort?

Re:How ITA's software works in the back-end (1)

grantek (979387) | more than 3 years ago | (#32973486)

The major goal of ITA and the airlines in this scenario is to reduce the booking failure rate to 0%, which is of course unattainable

Not unattainable, it just seems to be impractical with current technology to make the user wait for their "lock" on a transaction to pass through the ITA before being granted. Perhaps if Google can optimise the process a bit they can integrate the purchasing to the level where a seat becomes unavailable from the ITA's point of view before the user can proceed with the transaction.

Re:How ITA's software works in the back-end (1)

rickla (641376) | more than 3 years ago | (#32973902)

Impossible because the airlines "play" with the inventory all the time for marketing purposes and other reasons. When you query airlines for availability you don't get seat counts you get a number from 1-9 that is at best a hint. Also with all the traffic that books and cancels flights, the inventory thrashes around all the time. So you can't get it perfect but you can try to manage the failures, which aren't so bad because you can usually offer an alternative.

Don't be evil-and they haven't, for the most part (1)

novakom (1667041) | more than 3 years ago | (#32968704)

As someone who is unfamiliar with this part of the industry, I appreciate the articles and the clarity it brings to the different issues, including Google's probable interest in ITA Software. With that said, I find the conclusion - that Google is primarily interested in offering personalized ticket prices - is, while at least somewhat plausible and certainly disturbing, pretty unlikely. First, there's the whole thing about how that's illegal (though granted, few in the justice department would be able to decipher the technical aspects and come to that conclusion), and second, while Google is getting its hands into everything, I (at least) have yet to see a situation where it's doing it in an actively malicious way that does not benefit the consumer. Search? Makes $, but provides good service. Gmail? Increases market share, but again provides good service. Android certainly has increased competition and innovation in the mobile arena, say what you want about the fragmenting of the platform. Even the Nexus 1 at least tried to do good things with unlocked phones and service competition, despite its hardware and software flaws, and its use of 2.1 probably accelerated the development of current phones like the latest Droid devices. I find it hard to believe that Google would try to actively and maliciously take advantage of consumers in the process of making a buck better than an existing company makes a buck. Is there $ in it for Google? No doubt, but I also don't doubt that there will be a reason for consumers to use the service-there almost has to be, because anything less would hurt Google's reputation, and that would be far more damaging than the failure of almost any possible product they could put out there.

Re:Don't be evil-and they haven't, for the most pa (1)

swb (14022) | more than 3 years ago | (#32971434)

And maybe even personalized fares make sense from the perspective of what *I* want a "personalized" fare to be versus the evil, how-much-can-we-take-him-for idea of personalized fares.

For example, I have a gazillion frequent flyer miles; when searching for flights, I want to find the cheapest coach seat I can upgrade to first class via miles. I'd love a flight search that gave me that data as my "personalized fare" (ie, cost + miles). It's a total PITA to do that now on the airlines web site.

Two words - demand segmentation (0)

Anonymous Coward | more than 3 years ago | (#32968752)

Posting anonymously because I, um, have some experience with this stuff.

One of the big things that this could do is further segment the market for air travel. For those who don't know, airlines already have revenue management tools that allow them to predict the best mix of customers they can get out of any given flight. Airlines make money only when a seat is full, but they don't make money if they can't sell enough seats above the break-even price for operating the flight. Besides the obvious difference between coach and first class, most carriers have tons of "fare classes" that are used to sell the same type of seat at different prices and/or restrictions. For example, let's say there's 140 coach seats on a typical NY to LA flight. Some booked way in advance or reserved for group travel at a travel agency are going to go for $125 or so, most are going to go for the $400-800 range, and last minute travellers get to pay full fare, almost as much as first class for a coach seat. (This is why "complimentary upgrades" are offered on full-fare (Y) seats.) Bottom line is that you may have paid $300 for your seat, but the guy next to you might pay $1200+ for the same class, same time, same flight.

The calculated mix of prices is extremely complex, and based on history and future predictions. Google seems to be incredibly good at predicting consumer behavior online. Therefore, this is a natural fit. Airlines will sign up to be included in this because it means a more reliable predictor for pricing. Well-run carriers keep the gouging down to a "reasonable" level, others squeeze every single nickel out of passengers. A system like this that pairs consumer behavior trends with the pricing model will allow a carrier to do either of these.

Example: When you were signed into your gmail account last, you searched for golf clubs, pricey restaurants and luxury spa getaways. You're probably more likely to care less about the price of your ticket than the guy who searched for hostels, cheap rental cars and other "budget" websites. Taking that data in the aggregate and pairing it with the airline searches people are doing gives airlines another data point to play with. Taking that specific data (yes, yes, I know there's a privacy policy) would let the carrier present different fares for different search profiles. Airlines would absolutely love a no-privacy-policy, complete history of what you look at online, the same way an insurance company would love to get information about you that they can't obtain publically. I believe the polite term used is "not leaving money on the table."

I fully expect the day I get turned down for life insurance because of my Dunkin' Donuts, Tim Horton's and Starbucks coffee habit.

Re:Two words - demand segmentation (1)

emt377 (610337) | more than 3 years ago | (#32970892)

Example: When you were signed into your gmail account last, you searched for golf clubs, pricey restaurants and luxury spa getaways. You're probably more likely to care less about the price of your ticket than the guy who searched for hostels, cheap rental cars and other "budget" websites.

So you'd create an account solely for the purpose of making budget travel arrangements - then seed it with a history to yield the best possible deals. Works for me.

Conflict of Interesting? (2, Interesting)

Gr33nJ3ll0 (1367543) | more than 3 years ago | (#32968916)

In the second part of his series he reveals that he has worked in the past for AirTreks, and continues to be involved with them. AirTreks appears to be a competitor to ITA, so while these articles are interesting, I think you need to take his conclusions with a large grain of kosher salt.

Re:Conflict of Interesting? (1)

ehasbrouck (539420) | more than 3 years ago | (#32969676)

I disclosed my association with Airtreks.com partly as part of the basis of my expertise in the field, knowledge and partly because some might see it as a conflict of interest. If you want to disregard what I say for that reason, you are of course free to do so. However, Airtreks.com is not and has never been a competitor of ITA Software. ITA Software is a b2b provider of services for other travel companies; Airtreks.com has deployed its proprietary technology solely for its own use, rather than (to date) licensing it to any third parties. Airtreks.com focuses on integrating unpublished (consolidator) prices from multiple sources; ITA Software focuses on published fares, or at most on consolidator prices from a single source. Airtreks.com focuses exclusively on complex international journeys optimally priced as multiple tickets; ITA Software's priority is the simplest domestic journeys that can be priced as a single ticket. Basically, Airtreks.com targets and has optimized its systems for the niche furthest from ITA Software's core market. Some companies license services from ITA Software (for domestic prices and tickets) and also are affiliates of Airtreks.com (for complex international journeys), just as Sabre for a time offered a co-branded version of Airtreks' service to its subscriber travel agencies, alongside its own pricing tools (which like those of ITA software are optimized for single-ticket domestic published fare pricing).

Re:Conflict of Interesting? (1)

Gr33nJ3ll0 (1367543) | more than 3 years ago | (#32969840)

Okay, that does clear things up a bit. However, I think that you should have disclosed this sooner, maybe in the beginning of the series, and added some additional information to further clarify it. From what you've said AirTreks makes motorcycles, to ITA's Mac Trucks. Very closely related, and potential competitors, but not currently in exactly the same market. BTW, I enjoyed the whole series, it was well written and very easy to understand for somebody who's not involved in what appears to be a very byzantine business.

Re:Conflict of Interesting? (1)

ehasbrouck (539420) | more than 3 years ago | (#32970884)

I think your "motorcyles to Mack trucks" analogy is about right. My affiliation with Airtreks.com is described in detail in a "Disclosures" section of each of my books and on the Disclosures and Disclaimers [hasbrouck.org] page of my Web site, which is linked from my home page and every page of my blog (including each article in this series), and which goes into more detail than that of any other travel author, journalist, or blogger I know. Because it seemed particularly relevant, I also mentioned it inline within the article to which it most pertained.

From an industry insider... (1)

ADRA (37398) | more than 3 years ago | (#32969592)

" ... because it is likely to exacerbate the trend toward personalized and less transparent pricing of airline tickets"

Its already way too late for that my friend. There are millions and millions of public fares ('tenders for offers') on the market at any one time. Many are never even available, any many are locked down to only specific groups. The systems are so crazy that companies spend millions of dollars on systems just to figure out their -own- fares. That's just to see if I can make an offer for a fare. When we worry about booking a fare, we have the wide variety of travel agencies that each have their finger in the commission pot, so who knows how much savings are being passed on to the actual consumer and how much the agent is swallowing. Don't forget the 'tax' (aka surcharges, not a real tax) that more and more airlines are tacking onto their flights. This is usually highlighted in a less visible font $500 .. .... (+ 300 tax ) .. ouch

Here is what usually happens when buying a ticket online:

      Consumer - Types in their From/To & dates
      Internet Booking Engine - Searches through the GDS' for the most appropriate itineraries for the dates / passengers / etc.. (This is the expedia / travelocity / etc..)
      GDS - Ties in with fare management systems (reading published fare data for compatible fares & surcharges), scheduling firms (when / where flights are coming and going), reservation systems, and few other smaller sources to find an itinerary that matches whatever criteria you specified in your journey
      Airline's Reservation System - Confirms availability and makes the booking and reserves a placement on the plane (usually a single airline company per system, though there are shared hosting systems for small guys)

My best assumption is that the want ITA to better refine the Google experience of the "Internet Booking Engine". To be fair, every time you see the annoying spinning "seaching for cheap fares" messages from sites are usually the result of querying GDS systems for appropriate matching fares/itineraries. I suppose some smart caching can speed that up, but can lead to false positives for bookings.

PS: Dirty little secret for those not in the know: Reservation Systems book seats with the assumption that people won't show up to flights, so they quite often oversell if they get the chance. If you've ever been bumped to a different class or off the plane, this is most likely why

Re:From an industry insider... (1)

rickla (641376) | more than 3 years ago | (#32973912)

Agents swallowing what, a dollar? Commissions are rare, most travel sites are not making anything on flights at all except if they have a service fee, it's all in the hotels and other services.

Re:From an industry insider... (1)

ADRA (37398) | more than 3 years ago | (#32979240)

Trust me, basically all travel agents make a profit. If the sites aren't moronic, they will have themselves as agents of the airline for the commission (usually a % of the ticket's fare value). Its pretty standard practice.

Re:From an industry insider... (1)

rickla (641376) | more than 3 years ago | (#32982264)

Not any more in this country, rare. You can't be an "insider" if you think otherwise.

Re:From an industry insider... (1)

ADRA (37398) | more than 3 years ago | (#32984454)

1. The US is not the world.
http://en.wikipedia.org/wiki/Travel_agency#Commissions [wikipedia.org]

http://www.atpco.net/atpco/products/negfares_dc.shtml [atpco.net]

http://www.pacificepoch.com/newsstories?id=1625547_0_5_0_M [pacificepoch.com] ...

2. Outside of negotiated fares, private fares are quite often negotiated outside of published fare world, and the majority of them have commission rates tacked on through partnerships and agency agreements. Some airlines utilize them more than others but there it is.

Maybe the starved US airlines that are already flying on fumes can't afford the overhead of agency commission, but there are a vast number that are.

Portends? (1)

vvaduva (859950) | more than 3 years ago | (#32969996)

I refused to read this just because the word "portend" was used. Are you telling me that /. is getting so classy to where no other more commonly used word could be use din the title??

Real-time search (1)

kanthaka (549945) | more than 3 years ago | (#32970004)

With ITA Google doesn't just get a database, ITA's QPX system does much more than that. It could be thought of as a variation of real-time search--ITA gets fare updates thoughout the day (4 times a day, if I remember correctly). ITA has been working on making their fare search engine more general purpose, and I don't think it's a stretch to think of it as another way to improve Google's real-time search capabilities outside of the travel area.

Re:Real-time search (1)

rickla (641376) | more than 3 years ago | (#32973920)

Wait till you see what ITA does with google, QPX is great but they will do better.

Ax To Grind (0)

Anonymous Coward | more than 3 years ago | (#32970418)

Wow, nice unbiased articles there. At least the author is up front about his conflict of interest.

Google is Too Big To Fail now (1)

ecloud (3022) | more than 3 years ago | (#32970506)

I bet they will do a better job. Most of what they do turns out pretty good. But it's getting a little scary that we depend on Google for so many net infrastructure pieces now. This will be just one more. I can imagine a future in which something goes wrong and the gov't would have to step in because of the risk to society if some of their most critical services were allowed to fail. Or, in which Google is broken up after having monopolized too many industries.

NeedleBase as a GUI for MetaWeb - the real reason (0)

Anonymous Coward | more than 3 years ago | (#32973302)

IMO everyone in this thread has missed the point entirely of why Google bought this company.

This article posted at giga-om covers the real story.

http://gigaom.com/2010/07/19/meet-the-web-database-company-google-just-bought-hint-not-metaweb/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+OmMalik+%28GigaOM%29&utm_content=Twitter

Google will try to integrate NeedleBase with Freebase, and eventually AppEngine. Structured Data is going to become the basis for APIs and commerce on the web and this is a part of Google's strategy to remain relevant in the market.

I'll tell you what it means (1)

Chaostrophy (925) | more than 3 years ago | (#32974022)

Lisp is now supported language at google. ITA is one of the largest Lisp shops in the country.

If you've used Orbitz... (1)

softegg (938655) | more than 3 years ago | (#32974466)

... you've used ITA's search engine. A lot of the major airlines have licensed it for their own websites as well.

Unless you are one of the licensees, I don't think anybody has anything to worry about from this. The tech has already been out there for some time.

Factual error (0)

Anonymous Coward | more than 3 years ago | (#32974834)

currently all owned by groups of private equity investors, so they need not report publicly on their finances or operations

This is actually inaccurate; Amadeus (one of the 3 big GDSs) was put up on the Madrid stock exchange earlier this year.

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