Sunday, June 29, 2014

Google's schizophrenia

In a highly controversial 2011 transaction, Google purchased ITA software. ITA offered Internet-based software to the airline industry. The company's products included an airfare pricing management system for airlines and travel distributors as well as a passenger reservation management and departure control system. The deal raised questions how far Google would attempt to go into the online travel business.

Later in 2011, Google launched Flight Search, the first product resulting from its purchase of ITA. Also, Google continued to improve its hotel listing service by including virtual tours as well as pricing information.

As reported by The Economist in "Sun, sea, and Surfing" (June 21. 2014), analysts estimate that some 5% of Google's advertising revenue comes from online travel agents such as Expedia and Priceline. So Google may be reluctant to compete too aggressively in this space.

In 2014, online travel agents were spending some $4 billion in digital advertising. Google perhaps was pondering a lesson from the AOL/Time Warner merger, in which AOL struggled (often unsuccessfully) to harmonize the conflicts that emerged with its advertising partners after it owned competing media and other content as a result of the Time Warner deal.

Google appears to be wrestling with its two minds about becoming a major online travel service. Expedia and Priceline are not without some leverage in helping Google make up its mind.

Thursday, June 26, 2014

Google purifies Android

Google has acquired Appurify, which offers technology to automate the testing and optimization of mobile apps and websites for developers. Appurify was founded in 2012 and current has 20+ employees who will join Google. Google Ventures had led an investment round in Appurify, so the deal represents a staged acquisition.

Application testing and optimization is a big deal for Android. Tim Cook (Apple CEO) has highlighted Android's fragmentation problem, glibly quoting others who have dubbed Android a “toxic hellstew of vulnerabilities.”

We'll now see how much the Android developers' stew can be consecrated.

For a complete review of Google's M&A activity during 2014, see