Google made a significant strategic shift last week when it said it would spend $700 million to buy ITA Software and its flight information business. Google had previously stayed away from vertical search when possible, but now it will be smack in the middle of the travel vertical: ITA is estimated to be involved in about 50 percent of U.S. airfare searches, including those on Bing and Kayak.
Google usually prefers “general tools for search,” Google VP Marissa Mayer said on a conference call about the ITA deal. But at times, “to provide the best user experience and most relevant results we need to have a special set of data and/or a vertical interface to really express what [users are] looking for” — and that’s true in air travel where user queries about dates and locations are particularly complicated, she said.
Plus, by moving into vertical search, Google can compete better with up-and-comer Bing, and it can get closer to the point at which its users actually spend money (which should theoretically be more valuable, though VC Bill Gurley suggests that taking out the middleman could actually mean a decrease in revenue).
So what about other search verticals? Are there other major data providers that Google could buy – perhaps in real estate, sports, entertainment or jobs? I poked around a bit this week to talk to vertical data aggregators and their customers to get their thoughts.
Real estate: There is indeed a big database of real estate data in the U.S., the multiple listing service (MLS). Put together by real estate agents themselves, it only allows access via brokerages. So vertical search engines like Trulia and Zillow build out their coverage by adding listings individually and in chunks from brokerages and home owners. That workaround means they have slower and less complete access to data (it’s why, when I was recently shopping for a condo, I relied on searching listings at Redfin, which has better data since it’s a brokerage).
I asked Redfin CEO Glenn Kelman for his thoughts. He replied via email:
The most coverage Trulia itself has ever claimed is 70%; Zillow is probably no better. The data that Google wants is almost entirely in the MLS. But MLS data is only available to a brokerage like Century 21 or Redfin. The MLSs are very unlikely to share that data with Google any time soon, and Google is unlikely to buy a brokerage to get access to the data. By itself, Google Base hasn’t yet been successful in real estate, so far as I know.
Google had reportedly looked into buying Trulia late last year, around the same time it was checking out the local reviews site Yelp — another vertical play. Trulia, which is probably still the best bet for Google to acquire, did not reply to a request for comment for this story. Meanwhile, Zillow has developed a close relationship with Yahoo, announcing a deal today to power its for-sale listings.
Sports: The market leader in sports scores and reports is STATS, which counts Google among its clients. However, this is not the sort of company Google could buy as it is jointly owned by the Associated Press and News Corp. End of story. STATS last year acquired what was seen as the No. 2 player in the space, PA SportsTicker, which had previously been owned by ESPN. Another smaller and well-recommended competitor in the space is the Sports Network, based in Hatboro, Pa. If Google wants to scoop another ITA up, the Sports Network might well be the one.
Entertainment and events: Google has already built some vertical elements out in entertainment — for instance, it has its own movie listings interface and will respond to queries about movies with lists of show times. Bing, meanwhile, takes its vertical entertainment information from sources including Zvents and Tribune Media Services (a subsidiary of the Tribune Company). Zvents might be an acquisition target — it’s a San Mateo, Calif.–based company funded by AT&T, NAVTEQ, NetService Ventures, Nokia Growth Partners, Red Rock Ventures and VantagePoint Venture Partners.
Jobs: Gautam Godhwani, CEO of the job aggregator Simply Hired, said his company “does not rely on any single information source in a significant way.” He said there is no ITA equivalent in jobs because the data is so widely distributed — “across millions of sites, including job boards, newspapers, career sites and government sites”– and it is highly unstructured. So to get into this vertical, Google might have to level up and buy an aggregator.
However, while ITA’s main business was in airfares, the company wasn’t solely about travel. ITA had been working on something called the Needle Project — a platform for merging diverse sets of web data into a database that could be queried. And it had already built a test site of festivals and events, similar to Zvents, as a case study to show how non-programmers could use the system. So Google could potentially use ITA as a way to get into many more verticals without additional acquisitions or major new products. Perhaps Google was interested in vertical search, but it may be even more interested in an easy way to take massive amounts of unstructured data and give them structure. It would be the equivalent of spinning straw into gold.