The Day The Earth Changed

Today I posted a comment on TNooz in response to the story of Expedia's decision to 'punish' American Airlines for their behaviour in the dispute with Orbitz and its 48% owner Travelport.

I am saddened by the escalation of the dispute to preemptive actions by Expedia who was not a party to the actual dispute. Moving from vocal to action means that Expedia crossed the line. One in my view they should not have done.

The dispute has moved beyond the basic issue of direct connect and content control to battle of almost epic proportions.

You can find Kevin May's scoop story on TNooz where I also write as a node.

Here is my comment in full on the story.

TEXT FOLLOWS:

Today was one of those days when the world changes. For better or worse. Analysis next year will in my view demonstrate this was the seminal moment when indeed things changed.

Perhaps one perspective is to consider that there is a peeling back of the onion skin. The web is about transparency - as we see here at TNooz - we can comment freely - and this is part of the fabric of today's business and social world.

The true cost of the airline ticket has morphed from a homogeneous single bundled (and commoditized) price to a more transparent view of the components that make up the airline ticket. Obviously that makes it harder from the consumer's point of view to shop. But we all need to get over that. The Genie was let out of the bottle a long time ago and its ain't going back. From today onwards that now includes the cost of distribution. This transparency allows the product owner and the seller to attach a clearer monetary value to its brand - good or bad. Further as this dispute has demonstrated the brand proposition of the intermediary now becomes clear.

In my view Expedia's move is very ballsy but I question whether it was smart. In my view they have traded demonstrating their power for their value as an unbiased intermediary. Sadly if Expedia is not able to offer a level playing field to its customers and ends up in dispute with its supply chain then it must accept that its value proposition has changed. In my judgment that change is irrevocable - another genie out of the bottle that isn't going back. The preemptive action by Expedia today demonstrates how they feel. Expedia can no longer position itself as the champion of unbiased neutral intermediary, which to the consumer is an essential part of its proposition. It becomes clear that the company and its brand have optimized its product offerings to its own selfish ends and now 'games' the customer as much as the suppliers can do through their own direct channels such as their websites.

Thus now the Expedia Company through its own actions has removed the (admittedly thinly veiled) veneer of neutrality from not only the Expedia brand but also its family of brands from Hotwire to TripAdvisor.

The reaction by the intermediaries and organizations who have thrown more than vocal support of support of Orbitz in its dispute with AA, in my view - may have shot themselves in the foot. The consumer will now realize that the intermediary channels as a class are not acting in the best interests of the consumer. As I noted in my 2011 predictions the concept of value finding will now emerge. For those Intermediaries who support the Orbitz and its 48% owner Travelport their position becomes tainted in my opinion. Value Finding will definitely be part of the Social Web. Thus they have forfeited their ability to be an arbiter of customer value which has very broad and deep long lasting implications.

Unlike in media where there is a definitive traditional separation between publishing and editorial content, in travel etailing, the line for an unbiased intermediary has been crossed. Thus anyone owning an outlet will now find it harder to maintain some semblance of neutrality and consumer advocacy.

It gives a whole new meaning (not necessarily good) to Expedia's current tag line - where you book matters.

Cheers