Technological competition at its finest – the world of online travel search

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I can feel your eyes tiring through the computer screen. Online travel? Why do I care? And why should I spend five minutes reading your blog post? I’ll take those one at a time…you care because technology is moving in this area and Google is involved. You should read this, because the opportunity cost is minimal – i.e. you’d otherwise have to go back to something boring, like doing your job.

Many of us have had at least some experience purchasing flights from an online agency or even a standard brick and mortar travel agency. They can process your order, book your flights, and most importantly, take your money. Travel agencies are set up to do those things, but that technology and process is not necessarily the same as finding the flights in the first place.  It is fairly natural, then, that companies that specialize in finding the right flights at the right prices would be better placed to develop better search technology than what the travel agencies could do. Or maybe I’m only writing that because it has already happened, and it always seems so much easier to predict the past.

Enter Google, and friend of the blog, Larry Page (ok, more of an admiree than a friend). Google, owner of a $169 billion market cap, needed to burn some extra cash, and carefully considered its next target. Actually, it was probably more like “ok, we’re the kings of general search, but if people want to buy plane tickets, they don’t come to us – that means that some other search firm is actually making money, and it’s not us. What should we do about it?”

I’m sure they at least considered the idea of building their own travel search engine, but remembered all the learning that allowed them to reach the top, and decided to take the lazy way out – they bought ITA. I mean, what’s $700 million among friends? We at TPS report love the humility implicit in this, because instead of building it from scratch, they can take the best of their know-how and combine it with ITA’s well-established product (they already serve Orbitz, Hotwire, and Kayak).

However, Everbread might have something to say about all this before we just hand Google the Dukedom of Travel Search. The young upstarts at Everbread have developed what they believe is a superior product, and they aren’t scared of Google.

While the other search firms use boosted carrier logic in their algorithms, Everbread’s claims to achieve NP-complete searches. What is NP complete? In non-mathematical terms, it means that every possible solution to a problem is evaluated, ensuring that the optimum result is obtained. Plus, they’ve got a bit of star power on their board with the risk-taking former Skype CEO, Michael Jackson.

Flight from Bristol, UK to San Francisco, California on July 17? The number of viable options are exponentially greater than your typical search on Orbitz would reveal. When performed on carrier boosted logic, the big airlines that pay search firms just so happen to appear, while smaller/cheaper airlines do not. NP-complete searches in this case would take days or even weeks to compute for the standard search firms. There is just too many possibilities and not enough computing power – until recently.

The consumer? Well, we just don’t know any better. Plus, who wants to go through the hassle of searching every tiny airline for an extra 40 bucks (in the rare case that we happen to stumble on the right combination)? However, the Department of Justice is investigating the boosted carrier logic used by some of the search firms to determine whether this constitutes anti-competitive behavior. So stay tuned to the TPS report for further developments.

The good news in all of this: as search technology improves, barriers to entry fall…and the big winner is…us.

You mean there isn't just some dude in the back room calling all the airlines?! *Note - meta search means a search that combines and presents the outputs of multiple search engines.

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