Expedia claims it has little to worry about a potential Google-ITA Software merger, but should Orbitz be concerned? Well, that's another story.
Dara Khosrowshahi, the Expedia Inc. CEO, calls ITA Software a "very strong" technology company, but adds "from our standpoint, we don't feel too exposed" to the rumored merger.
That's because Expedia has built an airfare shopping and pricing system, Best Fare Search, which is "similar" to ITA's QPX air shopping and pricing system, Khosrowshahi claims.
Orbitz, on the other hand, would become highly dependent on Google for airfare pricing, should Google pull the trigger and buy ITA, because Orbitz.com uses ITA's QPX for flight search, Khosrowshahi says.
It's probably true that Expedia.com would have less exposure than Orbitz.com on the air-search front if Google absorbed ITA.
But, if Expedia's Best Fare Search were comparable to ITA's QPX system, then why did Expedia's TripAdvisor contract with ITA [pdf] to use QPX for TripAdvisor's flight metasearch?
Why didn't TripAdvisor opt to use Expedia's Best Fare Search instead?
And, might there not be some exposure for TripAdvisor if Google buys ITA and then uses QPX as the foundation for a Google flight-metasearch tool?
On the other hand, would it really be in Google's interest, if it buys ITA, to cut off Orbitz.com and TripAdvisor when all of that fat, air-search revenue is coming in the door?
And are the Expedia Best Fare Search and ITA QPX systems really similar?
Consider Expedia's description of Best Fare Search:
"For example, our Best Fare Search technology essentially deconstructs segment feeds in the United States from GDS partners for air flight searches and recommends the best way to re-assemble multi-leg itineraries so that they are less expensive and more flexible for the traveler," Expedia states in its most recent 10-K report. "We are looking to expand this technology internationally."
So, Best Fare Search basically parses air segments primarily from the global distribution systems, which connect to airlines using very dated EDIFACT messaging.
QPX, though, calculates flight options and fares through direct-connects with airlines, OAG, ATPCO, IATA and GDSs, and is widely considered to deliver a best-in-class array of flight options with availability.
Meanwhile, apart from the issue of air pricing and shopping systems, it would remain to be seen how buffered Expedia would be if Google goes ahead and builds its own air -- and, more importantly, hotel -- metasearch capabilities.
At that point, given Google's market power, perhaps Expedia and Orbitz would find themselves in similar straits.
Meanwhile, Khosrowshahi, who was speaking at Expedia Inc.'s first quarter earnings call April 29, said the company would be "opportunistic" about acquisitions, especially for small, international media companies.
"I can tell you now there aren't any huge, huge targets out there, but that could change long-term," Khosrowshahi said.