Microsoft's Bing Travel is handing over flight metasearch duties to Kayak as the two erstwhile competitors bolster their existing alliance to counter Google's accelerated push into travel.
In the day's following Google's July 1 announcement that it intended to buy ITA Software for $700 million, there was widespread speculation that the move would lead to new strategic alliances.
The new Bing Travel-Kayak global partnership is one such major strategic move. After all, in Kayak's S-1 filing for its proposed IPO, Kayak says "our major competitors include general search engines such as Google and Bing ..."
Kayak is slated to begin powering flight metasearch for Bing Travel "in the coming weeks" as the first step in the new alliance.
Krista Pappas, Bing's global travel industry director, says air results are "the first step" in the new Bing-Kayak relationship, adding that "other steps have not been determined yet."
"We're harnessing the industry leader [Kayak] as a partner that can manage the innovations in metasearch," Pappas says.
Essentially, Bing is conceding that as a general search engine its focus was lacking in metasearch, despite its 2008 acquisition of Farecast, and it is turning over much of the reins to Kayak.
"The meta price business maybe didn't get as much attention as it needed to build out more unique experiences in the search experience," Pappas says.
"They (Kayak) are the leaders of innovation in travel search," Pappas says.
Bing intends to innovate on top of the core Kayak flight search results, Pappas says, with its flight predictions and features such as Bing's new autosuggest solution and instant search results.
In a "Bing Welcomes Kayak" blog post March 4, Pappas writes that the Kayak partnership will lead to more comprehensiveness on Bing Travel and will produce "a larger set of flight itineraries."
"For Bing this means we can focus our development resources on delivering even more unique and valuable features for customers," Pappas writes. "In essence, this lets us do more for our customers as we continue to invest in next-generation travel experiences."
Clearly, both Bing and Kayak, which are already allied in FairSearch.org to block Google's acquisition of ITA Software, see Google as competitive threat No. 1.
"It's vital to have a strong travel ecosystem and they (Kayak) are complementary to that," Pappas says.
Microsoft is a competitor to Google and "we think of Kayak more as a partner than a competitor," Pappas says.
For Kayak, the metasearch deal with Bing will broaden its reach and can only help with its IPO prospects as it seeks to portray itself as a viable competitor to Google Travel with or without the ITA Software deal going through.
In that vein, Kayak cofounder and chief technology officer Paul English recently got onto TV to position Kayak as a viable Google competitor because of Kayak's "innovation velocity."
The Bing-Kayak alliance certainly won't help the arguments of some opponents of the Google-ITA Software deal that the acquisition would make Google too formidable an opponent for the metasearch crowd to combat as now it appears that Bing and Kayak have strengthened their positions.
FairSearch, a coalition opposing the Google-ITA deal, doesn't see the issue merely as a matter of Google's market clout.
FairSearch states: “FairSearch and its members have said that they would welcome Google as a competitor in travel, but that the Google-ITA deal would give Google even greater incentive and ability to engage in anti-competitive behavior that would result in less competition in online travel, less transparency in search, and higher airfares for consumers. The issue is not with Google strengthening its position in travel – it’s how they do it, and ensuring that they do it in a way that doesn’t lessen competition in the market and hurt consumers.”
Adam Kovacevich, a Google spokesman, says of the Bing-Kayak search deal: "Combined with Kayak's comments that it can compete fairly against Google-ITA, this is just the latest evidence of how fast things are evolving in online flight search, and how much room there is for other players to compete. We’re eager to bring more competition and choices for consumers searching for flights online."
Steve Hafner, Kayak cofounder and CEO, declined all comment on the Bing deal.
And, Pappas, too, declined to comment on the terms of the deal, including whether or not Microsoft has made an investment in Kayak.
Both Kayak and Bing Travel use ITA Software to power part of their U.S. flight search.
It's unclear whether the Bing-Kayak partnership means that Bing will sever its ties with ITA.
When asked, Cara Kretz, an ITA spokeswoman, said: "It's our longstanding policy not to comment or discuss terms or specific arrangements of our customers."
The global nature of the deal could eventually put Bing Travel flight metasearch, powered by Kayak, into the U.K. for the first time as Farecast had not been ready for prime time in the UK market.
It's unclear whether Kayak may adapt some Bing Travel features for Kayak.com.
And, it's entirely possible that the Bing-Kayak alliance may eventually lead to Kayak powering Bing Travel's hotel search, as well, although Bing Travel's hotels currently are supplied by Orbitz.
So now that Microsoft and Kayak have made their chess move in response to the Google-ITA deal, it remains to be seen what kind of counter-move Expedia, another ardent opponent of the ITA acquisition, will execute.
In other developments, Bing debuted Bing deals on its mobile website and on the desktop, too.
Through an agreement with The DealMap, Bing aggregates local deals from major deals' providers such as Groupon, LivingSocial and Restaurant.com.
On the mobile website, Bing detects your location and serves up deals, whether they be for a tanning salon or two sandwiches from Burger King.
If you search for hotel deals, you find various offers ranging from room discounts to gift certificates toward drinks at local restaurants.
Bing is emphasizing the mobile platform for Bing deals: There is a Deals link on the homepage of Bing's mobile site.
In a blog post, Bing says to search for deals from your desktop you need to search for the name of the business, and then Bing will display a green icon if it is offering a deal.