Google Flights: Prepared for Takeoff?

In April, Google (NASDAQ: GOOG ) closed its $700 million acquisition of ITA
Software, which is a data mega-provider of online travel information. In light
of the company's enormous search business, this is a scary thing for sites
like Kayak, Priceline (NASDAQ: PCLN ), Orbitz (NYSE: OWW ) and Expedia (NASDAQ:
EXPE ). In fact, the Justice Department required Google to make some changes so
as to lessen the competitive impact. However, with the launch of its new travel
offering last week, called Google Flights, the competition should feel safe at
least for now. Why? To see, let's take a look at the key features of the
service. First of all, users can access Google Flights either from a tab
located at google.com/flights or through a search query (such as "fly from
nyc to las vegas"). You'll see an interactive map that allows you to view
flights for nearby cities. Below this, you'll also find a list of many flights
and their prices. If you like an option, you can click over to the airline's
website. All in all, it's pretty cool. And it's incredibly fast. But the
site has some issues. For example, the flight data is not as robust as rival
services. What's more, the interface still is a bit clunky. Google Flights
definitely feels like an early-release version. But hey, this is normal for the
company, right? Google likes to launch quickly, then get feedback. No doubt,
it's a good way to evolve a web service. Thus, as things get better, should
rivals feel more pressure? It's true that any competition will make an impact.
But the fact is companies like Priceline and Expedia have great brands. As a
result, search-based traffic is not necessarily critical. Besides, Priceline and
Expedia have full-blown services offering rental cars, hotels and even vacation
packages. Those companies also have thriving international businesses. Instead,
the losers are likely to be the search-based operators like Kayak and
Microsoft's (NASDAQ: MSFT ) Bing. It's certainly going to be tough to find
points of differentiation. Keep in mind that Kayak has filed to go public and
has been in registration for more than 300 days. In other words, in light of
Google Flights, it could be a tough deal to pull off. Tom Taulli is the author
of "All About Short Selling" and "All About Commodities." You also can
find him at Twitter account @ttaulli. He does not own a position in any of the
stocks named here.