Break up Expedia -- it may wield too much power over Priceline's fate.
Wait. Expedia recently spun off TripAdvisor so perhaps the axes can be sheathed.
OK, the statement about Expedia's alleged undue influence over Priceline is tongue in cheek, but new research from Citi shows that Expedia was indeed the largest traffic source for Priceline with an 18% referral share in January 2012. And that mark represents increased clout when compared with January 2010 (15%) and January 2011 (16%).
Perhaps Priceline should reconsider throwing all that dough into Google and do a little more advertising on Expedia sites. (OK, the tongue's wagging again.)
Mark Mahaney, managing director of Internet research for Citi Investment Research & Analysis, says Expedia's influential role as a traffic referral source for Priceline "highlights the extent of comparison shopping that occurs in the online travel vertical."
After Expedia, the leading sources of traffic for Priceline in January 2012 were the Kayak network (12%), Google sites (12%), Microsoft sites (9%) and Yahoo sites (6%), according to the Citi's Annual 'Net Influence Report.
In turn, Priceline and Orbitz Worldwide acted as a source of Expedia traffic at a pace of 7% and 4%, respectively, while Google sites (16%), Yahoo sites (7%) and Microsoft sites (6%) also chipped in as traffic drivers to Expedia in January 2012, the Citi research shows.
Among other online travel agencies, Orbitz's top traffic driver was Google (14%), which just edged Expedia (13%) as a traffic source to Orbitz.
Other leading referral sites for Orbitz weren't even close to Google and Expedia. Yahoo sites referred 5% of Orbitz's traffic in January 2012, followed by the Kayak network and Microsoft sites, which were responsible for 4% each of the Orbitz traffic.
It is interesting that although Orbitz and Kayak have been at odds during the last couple of years over changes that Kayak made to its advertising practices, which Orbitz alleges violated a contractual exclusivity provision, Kayak has steadily acted as a referral source for Orbitz at a 4% clip over the last three January's, the Citi research shows.
Citi breaks down Travelocity's traffic-referral sources as Google sites (12%), Yahoo sites (8%), Expedia (7%), Micrsosoft sites (5%) and Priceline (2%).
Among other leading online sites in the U.S., Southwest Airlines doesn't look to online travel agencies for referral traffic because the airline refuses to distribute its flights through the OTAs. Citi depicts Southwest's leading traffic referral sources as Google (16%), Yahoo sites (15%) and Microsoft sites (7%).
When looking at the leading websites in the travel vertical, Google is the most influential source of traffic and has been slowly, but steadily, increasing its referral share from 12% in January 2010 to 13% in January 2011 and 14% in January 2012, the Citi research shows.
In addition to its gains in the travel vertical, Google has also been increasing its influence as a traffic referral source in the finance vertical (13%). But, Google has seen its influence wane somewhat in the media (22%), retail (15%), autos (14%) and health (15%) verticals.