Business Case: Google & ITA - KOM · KOM – Multimedia Communications Lab 3 Google’s Goal...

Google.ITA.Buisness.Case.ppt

KOM - Multimedia Communications LabProf. Dr.-Ing. Ralf Steinmetz (Director)

Dept. of Electrical Engineering and Information TechnologyDept. of Computer Science (adjunct Professor)

TUD – Technische Universität DarmstadtRundeturmstr. 10, D-64283 Darmstadt, Germany

Tel.+49 6151 166150, Fax. +49 6151 166152www.KOM.tu-darmstadt.de

Presented by:Minh Hoang NguyenJohannes WowraMousie Fasil

30. Mai 2010

Business Case:Google & ITA

Technologie- und Marketing-Management in IT-/TIMES-Märkten

KOM – Multimedia Communications Lab 2

Content

Presentation of Google Presentation of ITA Software Business Case for Google Conclusion

Google’s Goal

“Our mission is to organize the world’s information and make ituniversally accessible and useful. We believe that the most

effective, and ultimately the most profitable, way to accomplish ourmission is to put the needs of our users first.“

Google’s market stand

Revenues: 23.650.563 $ Total costs and expenses: 15.338.377 $ Income of operations: 8.312.186 $

97% of the profit come from advertisements

Until today Google took over 70 companies Most of them are integrated in to the Google network Some of them are left untouched e.g. YouTube

Google’s Competitors

Every company which provides web users with information andrelevant advertising E.g. Yahoo! Inc. or Bing

Also vertical search engines and eCommerce sites E.g. WebMD, Kayak, Monster.com, Amazon, eBay, etc...

Social networks Mobile Applications Providers of online products and services

Content

Presentation of Google Presentation of ITA Software Business Case for Google‘s Conclusion

Founded in 1996 in Cambridge Develops software for the travel and airline industries Growth in 2008 was 175% Top 10 in Most Innovative Transportation Companies in 2010 (FastCompany)

Revenues

ITA Software Inc.

2003 $17.0 million

2004 $28.1 million

2006 $51.4 million

2007 $77.6 million

ITA‘s Software

QPX Management System for airfare pricing and shopping

RES Passenger reservation management system

IBE Internet Booking Engine

ITA‘s Customers

Airline Customers

Travel Distribution Customers

Content

Business Case for Google

Business purpose Acquisition of ITA Integration of ITA into Google Network New Platform for Flight comparison

Classification in TIMES-Market ITA & Google both in information sector But Google covers also Telecommunication (Android, Google Voice, Gmail) Media(YouTube, Google News) Entertainment(YouTube,Google Video, Google TV, Android)

Market-Development $88.4 billion in U.S. online travel Sabre $2.9 billion (2008)

Opportunities in the Market Online travel agencies focus on the U.S. market 65 % of online airline bookings goes through ITA Software

Additional Requirements & Resources None, since Google is experienced in software integration Also ITA Software is developed for easy system integration

Available Resources Google is leader in the online search market

Market position New in vertical search with respect to online flight booking

SWOT-Analysis Strength: High experience in integration of companies into Google Network Weakness: New in the market Opportunities: Domination over Kayak, Bing, etc... Threads: ITA competitors, e.g. Travelport

Compensation against risk factors If Acquisition does not lead to ROI Termination of Project

Content

Conclusion

Google cannot provide a full functioning Online-travel agency More competence are needed for that Goal

1 Billion investment into ITA is connected with high risk Admob costs 750m $ but is more important

Profit from the market is not predictable Directed advertisement leads to higher ad income

References

http://google.client.shareholder.com/investorkit.cfmhttp://www.google.com/finance?cid=9538830http://search.sys-con.com/node/1348892http://www.glgroup.com/News/Travel-Game-Changer---What-does-Googles-potential-acquisition-of-ITA-mean--

47949.htmlhttp://news.magnus.de/business-medien/artikel/bericht-google-will-anbieter-von-reise-software-ita-

uebernehmen.htmlhttp://www.traveltechnology.com/2010/04/google-and-ita-software/http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google

Additonal Informations

http://www.faz.net/s/Rub36B71B0E8E5C46E9AFBAF4B7B12FC9C5/Doc~EC976D79B436642C1ABE7658338A7E33E~ATpl~Ecommon~Scontent.html

http://www.travolution.co.uk/articles/2010/04/23/3443/opinion-what-would-google-do-with-ita-software.html

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