Pressure is coming at Google from some of its biggest advertisers demanding that it plays fair when finally unveiling how it will use the $700 million acquisition of ITA Software.
Expedia CEO Dara Khosrowshahi told analysts during the company's Q2 2010 earnings call late yesterday that the Google-ITA Software deal could have "very significant consequences" on the sector.
Highlighting Google's "considerable market power", Khosrowshahi said one of the main areas which Expedia will be monitoring is whether the search giant favours its own content and results over those of existing advertising partners, "whether it's algorithmic, inside their system or hard coded".
The extent to which such activity takes place would be a problem for Expedia, Khosrowshahi said.
"The way we’ve seen them operating in general has been fair, but we think they’d be wise not to kind of favor their own internal products over external products and create an unfair playing field."
Despite the concerns, Expedia was in "good shape" to handle the likely impact of the deal, with Khosrowshahi acknowledging that executives at Google have "done the right thing" and will build "a great product".
Meanwhile, questions emerged during the call over whether Expedia would be willing to expand its Best Fare Search product as a result of the Google-ITA deal so third parties could tap into its data, rather than remain customers of ITA.
Expedia's chief financial officer Michael Adler said the ten-year-old BFS pricing system is competitive with any of the other pricing products in the marketplace (such as those from the GDSs and others highlighted in Google new travel ecosystem).
Adler admitted Expedia may talk to some potential partners or airlines about using BFS but hinted the product had been built as an "in-house solution" and a fair amount of work would be required to commercialise it for third parties.
He added:
"At this point, it’s not something that we know whether we want to invest in, put time in and whether, frankly, it's practical. But we'll see.
"We’re very happy, especially with Google buying ITA, that we’ve got the BFS team and makes us worry a bit less about what the potential consequences of that transaction could be, at least for us."
NB:Earnings transcript available at SeekingAlpha.