![]() I assume that around a 6-8x size of revenue multiple for how much Google makes out of travel. Let’s eliminate a value of about 10% of that for non-air and we are at about $160 million for air alone. How did I come up with a number? I used the current run rate of Kayak as a model - the metasearch engine is running at about a run rate of approx $170-180 million gross revenue. Mulling over how much revenue Google might concievably makes out of travel, I estimate that Google makes about 10% of its gross revenue from the whole travel category. Leaving aside the travel agency and reselling side of the business, let's concentrate on the pure infrastructure cost of distribution for air passenger travel. For validation they need to look no further than the fact that ITA is powering Kayak, FareCompare, Orbitz, as well as the many airline websites. ![]() It is also symbiotic with the search part of Google’s business, enabling an end run around the metasearch players. Depending on who you talk to that represents about $7-10 billion direct segment fees and a further 10% for indirect (and rapidly growing) revenues the GDS command. The GDS makes a fair chunk of money as a sector. However the economics of the GDS-based model (not the companies) are compelling and this is what should strike fear into the heart of those in the distribution system. The immediate ability to leverage the asset became apparent. Plus its self-running.Īnd clearly, as we have seen, Google is not going to be shy to leverage its other potential assets in, say, mapping. It is run by fewer people but who are largely technology focused, meaning it is a good fit culturally for them. ITA on the other hand is relatively cheap, has less supplier contracts, but still it touches a large chunk of global air transactions. The business sector is also fairly mature. They are also expensive to run and have a fair number of staff-to-revenue ratio, unlike other Google enterprises. The GDSs have been owned at various times (and some still are) by equity players, making them not particularly cheap. However, purchasing one of the trio would represent a significant challenge to Google, not that they could not afford to do so if they choose. Now in some respects there was a strong case for Google to have looked at buying a GDS. The distribution of travel relies on technology that has been powered from one major source, the GDSs, both for intermediary distribution as well as direct airline passenger IT. Think of ATPCo (the industry fare clearing house) and SITA. Owners of raw content either do not want to sell, cannot sell or have failed to realize their value. The travel industry is very complex and requires a lot of technology to power itself. So here, finally, is my take on why Google really wants to get its hands on ITA. I looked further at other potential targets that Google could have chosen to spend some of its cash bucket on. I went back and read through a lot of the articles on the ITA Software acquisition. Another exampleĪ similar problem that I struggled with, to better illustrate this method: assume that we want the conversion rates between currencies specified in ranges A2:A, B2:B (with their appropriate three letter codes), in each case from a date specified in range C2:C.Up until recently I could not figure out – other than pure growth/greed desires – why Google wanted to pick on travel - and why now. If one of such specified arguments should be start_date (in this case without end_date|num_days specified), then we additionally need to use INDEX(GOOGLEFINANCE(),2,2), because the output of GOOGLEFINANCE with start_date (and no end_date|num_days) will be a 2×2 array, where only the last value is the one we need. ![]() This general method can be used to pass another arguments to the GOOGLEFINANCE function in a similar way, that is from specified ranges. The trick here is, as far as I understand, that MAP(LAMBDA) calculates the specified formula for each row in the input array separately (effect similar to manually expanding the formula over the whole range), whereas ARRAYFORMULA passes the whole array as an argument to the formula ( GOOGLEFINANCE is special and doesn't work intuitively with such input). Some inconveniences of GOOGLEFINANCE may now be solved by using MAP(LAMBDA) around it instead of ARRAYFORMULA. This is a new method since the introduction of LAMBDA and its helper functions in Google Sheets in August 2022. Use the following formula in the cell C1: =MAP(B:B,LAMBDA(ticker,IF(ROW(ticker)=1,"Share Price",if(isblank(ticker),GOOGLEFINANCE(ticker,"price")))))
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