Wednesday, March 18, 2009

Another holiday, another rumor that Google is interested in buying Expedia

Remember last April Fools Day when shares (and options) of EXPE shot up on rumors that Google was interested in buying Expedia? Well, yesterday was St. Patricks Day and yet again, the rumor mill was active that Google was going to take out Expedia.

Come on folks, this is just silliness.

First of all, while EXPE is clearly firing on all cylinders right now, its hardly the high-growth, new business model type of business that Google typically buys. Expedia is a great company for sure, with a great brand and great leadership but it is a big travel agency at heart - hardly very Google-esq. Of course Google would like to be deeper into travel but this isn't how (if they even decide to) they will do it. Just look at how things worked out for Yahoo! and Farechase as an example - not that we would hold up Yahoo! as an example of how to do much of anything right.

But more importantly, travel is one of Google's largest ad sales verticals. Do you really think they would potentially jeopardize the huge revenue stream from Expedia's current competitors (e.g. Priceline, Travelocity) and the suppliers themselves to own Expedia? Not a chance.

True, Google's Head of Travel, Rob Torres is an Expedia veteran and even still lives in the Seattle area, but we doubt he is looking to return to his old commute to Bellevue.

1 comment:

  1. Tom: This reminds me of when Google introduced that flight-search box several years ago. It's still there. You can input LAX to ORD in the Google search box and access search engines from Expedia, CheapTickets, Hotwire, Kayak, Orbitz, Priceline and Travelocity. There was rampant speculation, uninformed, at the time that Google would soon launch its own online travel agency. I agree that Google wouldn't want to trample some of its largest advertisers. Still, for conspiracy theorists among us, the Google flight-search box still defaults to Expedia. I would surmise that Expedia is paying top dollar for that. So, I totally agree with your take on the Google-Expedia rumors.