13 July 2010

Diller terms Google travel move disturbing

Google¹s use of its search engine to support its expansion into new internet services gives it an unfair advantage and puts it on a collision course with antitrust regulators, according to Barry Diller.

Diller, chairman of online travel company Expedia and InterActiveCorp, which has amassed one of the largest collections of internet properties, criticized Google for giving prominence in results to its in-house services.

³I think it is disturbing that Google is moving into serving individual spaces, rather than being search neutral," Diller told Dow Jones Newswire. "It is a dangerous step because it is inevitably going to cause problems with customers and regulatory authorities."

The comments come after Google unsettled the online travel industry with an agreement to pay $700m for ITA Software, whose technology is used to find airline flights and ticket prices.

By enabling Google to display suggested flights in reply to searches, the deal would give it a strong foothold in the largest e-commerce market and potentially put it in competition with companies such as Expedia.

Eric Schmidt, Google¹s chief executive, has said he expects a protracted regulatory review of the deal but that it would enable Google to create services making it easier for travelers to book travel online.

Diller said that Google was using its market power to gain an unfair advantage. He said regulators should deal with the ITA problem either by conditions or denial.

His comments echo complaints lodged with regulators in Europe this year about Google¹s spreading power as it moves into a wider range of specialized, or vertical information web services.

Google is attempting to enter a huge and growing market.

According to Forrester Research, last year, online travel bookings represent nearly 40 percent of all booking bucks. Expedia, Orbitz, and a very few others have (so far) pocketed the lion’s share.

By David Wilkening