Point of View

October 2010

The Google – ITA Software deal
How Android voice integration with ITA’s airfare query structure can drive travel innovation and create a more effective consumer experience

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Introduction

Google’s $700 M acquisition of ITA has driven both good debate and sometimes illogical lobbying on risks to airfare search integrity, competitor web traffic, advertising costs, and service to air industry customers.

There are positive opportunities, of course, and here we focus on a specific, less-publicized one that could have a meaningful impact in the near future:

Based on our tests, Google’s Android voice recognition outperforms Bing, Vlingo and possibly other speech solutions in travel-focused natural language search and is almost ready for mainstream adoption Integrating with ITA’s airfare query structure (and potentially hotels) is a key opportunity for Google-ITA to drive industry innovation and create a better consumer travel search experience

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

How it could work – the basic process

Google-ITA could convert spoken natural language terms to voice objects similar to drop down selections in booking engines, which would then integrate with the fare search query data structure. Hotel search is a potential opportunity as well.

“Fly 1st-class Seattle to LA August 25 coming back August 28 on Virgin America”

Google

ITA Software

VXML 3.0
Analyzes voice input using Speech Recognition Grammar Specifications (SRGS) to translate to text

SISR
Semantic Interpretation for Speech Recognition extracts key travel terms to convert to voice objects

QPX fare search
Voice objects matched to data structure for fare search query and result processing

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Potential high-level impact

In a sense, this is a component of a larger potential Google PC and mobile metasearch play, but it also impacts a key area of consumer experience needing improvement, and implications of leveraging the Android platform could include:

• Cutting multiple inefficient and redundant steps out of today’s mobile search and travel intermediary experience • Enabling consumers to bypass OTA and Metasearch competitors, who could not easily replicate it without considerable capital investment • Encouraging competitors to innovate and find other ways to improve and bring their mobile products to consumers • Prompting Microsoft and Apple to leverage their mobile platforms and alter the intermediary landscape further

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Potential vs current mobile search experience

Compared to today’s mobile search experience, voice search with fare integration would be much faster than inconsistent text links due to SEM/SEO manipulation, redundant steps, and multiple drop-down or typing fields
Speak or Type to search Speak or Touch to select airline Speak or Touch to select flight

Potential Voice search to booking path

Airline / OTA Booking path

Speak or type to search

Inefficient text links

Re-select “Flight”

Re-enter terms in multiple fields

Flight result matrix or list

Current mobile search to OTA mobile path

Airline / OTA Booking path

Note: Expedia used for demonstration of general steps, not to imply variance in quality relative to other OTA paths
2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Potential vs mobile app download experience

Comparing to downloaded mobile apps, current metasearch or OTA apps also require several additional steps, including multiple drop-down or typing fields and additional site selections
Speak or Type to search Speak or Touch to select airline Speak or Touch to select flight

Potential Voice search to booking path

Airline / OTA Booking path

Open app

Multiple text, calendar, or drop-down fields

Flight result matrix or list

Flight detail

Choose OTA or supplier

Current metasearch mobile app path

Airline / OTA Booking path

Note: Kayak used for demonstration of general steps, not to imply variance in quality relative to other metasearch apps
2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Why timing is right for Google’s opportunity

Speech recognition has seemed promising for years, but has mainly been limited to electronic voice menus…so what technology and consumer forces are aligning with Google capabilities to enable this now? Consumer adoption and Google advantages

Technology elements

Travel lends well to speech recognition – demonstrated in Defense Dept tests 1991-1995

Android currently outperforms Microsoft and Vlingo for natural language voice search of travel terms

Smartphone penetration, processing power, and dual microphones growing rapidly

Travel is a strong candidate for mobile voice search and multimodal engagement

In a short period of time, 25% of Android searches are already Voice

Cloud enables network-based speech to process larger vocabularies than embedded apps

Google-ITA will have the tools to execute it

Google has invested heavily to train speech algorithms

Mobile and Tablet search should be 15% of searches by 2013-2014

Travel planning requires relatively small grammar sets

Consumers rapidly adopting voice in local search, car navigation, and platforms like Microsoft Kinect

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Competitive implications

Only Google-ITA could achieve proprietary voice and fare technology integration, but Microsoft and Apple (a threat to enter) own their mobile and speech platforms and have a key advantage in interfacing voice search directly with consumers.
OTA and Metasearch players are at risk if Google, Microsoft or Apple leverage ownership of mobile platforms and would also need to partner with Vlingo, Loquendo, Nuance or others to embed speech.

Mobile platform
Android

Speech platform
Android

Fare query platform
ITA Software

Windows Phone 7

MSFT Speech / Tellme Travelport ePricing

iPhone

Siri

Amadeus Meta-pricer Sabre

Vlingo None Must distribute apps or gain search traffic through Android, WP7 and iPhone platforms Nuance Loquendo Vayant Everbread Expedia BFS (if productized)

Promptu
MSFT API Android SDK

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Sample testing shows Android advantage and challenges

To evaluate the readiness of voice search platforms to handle travel-specific natural language input strings, we tested 140 searches on Android, Bing (Windows Phone 7), and Vlingo speech platforms (see Appendix for specific samples). Our tests indicate Android is currently more advanced for travel, while Bing performed fairly well and Vlingo was poor.

Sample - “Fly 1st-class Seattle to LA August 25 coming back August 28 on Virgin America”

Platform Android Android

Noise level loud - Starbucks quiet - office

Key term success rate 30% 85% 70% 10%

WER 29% 4% 7% 15%

Queries 20 20 20 20

mean search time (sec) 7.4 3.7 4.9 3.5

mean words 12.4 13.2 13.2 13.2

mean error words 3.6 0.6 0.9 2.0

Windows Phone 7 quiet - office Vlingo quiet - office

Improved accuracy and search time is needed for practical use, especially in noisier environments, which we expect will occur as dual microphone devices proliferate and cloud technology and speech training sets across all platforms improve.

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendices

Appendices
Defense Advanced Research Project (DARPA) Travel Planning testing

Travel vocabulary size and relative speech complexity indicator

Lenati voice test sample data by phone platform

Projected mobile and tablet search query growth 2010-2014

Voice technology provider segments

Voice technology overview

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendix

Travel planning ideal for speech recognition

Travel lends well to speech recognition, demonstrated by testing during the Defense Advanced Research Project (DARPA) from 1991-1995

DARPA’s Air travel planning test: • Used multiple microphones • Word Error Rate (WER) dropped from 20% to less than 3% in 5 years

• Measured to be as effective as human interpretation

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

http://www.itl.nist.gov/iad/mig//publications/ASRhistory/index.html

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Point of View

Appendix

Travel planning ideal for speech recognition

Travel vocabulary consists mainly of finite sets of origins, destinations, dates, travel brands, and other key categories rather than continuous or conversational speech that becomes incredibly complex in vocabulary, meaning, nuance, and dialect.

Data set vocabulary size and relative complexity by speech type

• Therefore travel likely fits in the least complex speech recognition type • And reduces the complexity of creating voice objects to match fare search data structures

ABI Research

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendix

Sample testing results

Android error rate was low, and in most cases, errors did not affect relevant terms needed to create Voice Objects
Spoken search string Text result WER Search Virgin America flights from Seattle to San Francisco August 25 returning August 28 Search Virgin America flight from Seattle to San Francisco August 25 returning August 28 0% I want to fly to Seattle from Washington DC on October 15, returning October 20 I want to fly to seattle from washington d c on october 15th returning october 20th 0% I want to fly to Philadelphia from New Orleans on October 15, returning October 21 I want fly to philadelphia from new orleans on october 15th returning october 21st 7% Fly from Seattle to Anchorage August 25 returning August 28 Alaska Airlines fly from seattle to anchorage august 25th returning august 28th alaska airlines 0% Find flight Boston to Ft. Lauderdale August 25 returning August 28 JetBlue find flights boston to fort lauderdale august 25th returning august 28th jetblue 0% Search round-trip flight St. Louis to Phoenix January 5 to 9 search round trip flights saint louis to phoenix january fifth 29 17%

Windows Phone 7 error rate was higher, but in many cases did not affect relevant terms
Spoken search string Text result Search Virgin America flights from Seattle to San Francisco August 25 returning August 28 virgin america flights from Seattle to San Francisco Aug 25th returning August 28th I want to fly to Seattle from Washington DC on October 15, returning October 20 12 flight to Seattle from Washington DC on October 15th, returning October 20th I want to fly to Philadelphia from New Orleans on October 15, returning October 21 Iwon to Fly to Philadelphia from New Orleans on October 15th raton October 20th Fly from Seattle to Anchorage August 25 returning August 28 Alaska Airlines flights from Seattle to Anchorage Aug 25th returning August 28 Alaska Airlines Find flight Boston to Ft. Lauderdale August 25 returning August 28 JetBlue flight Boston to Fort Lauderdale August 25th returning on 20 Eights Jet Blue Search round-trip flight St. Louis to Phoenix January 5 to 9 round trip flight St. Louis to Phoenix January 5th 29 WER 0% 27% 13% 0% 17% 17%

Vlingo was worse than expected at this point
Spoken search string Text result Search Virgin America flights from Seattle to San Francisco August 25 returning August 28 search virgin america flights from seattle to san francisco otis 25th return in august 28 I want to fly to Seattle from Washington DC on October 15, returning October 20 I want to fly to seattle from washington dc on october 15th return in october 20th I want to fly to Philadelphia from New Orleans on October 15, returning October 21 I want to fly the philadelphia from new orleans on the kerber 15 return in october 21st Fly from Seattle to Anchorage August 25 returning August 28 Alaska Airlines fly from seattle to anchorage august 25th attorney in august 28 alaska airlines Find flight Boston to Ft. Lauderdale August 25 returning August 28 JetBlue flight boston the fort lauderdale august 25th return in august 28 jet blue Search round-trip flight St. Louis to Phoenix January 5 to 9 search round trip lake saint louis to phoenix january fifth 29 WER 14% 7% 20% 8% 25% 17%

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendix

Voice will help drive mobile search growth

Both Google and Microsoft have invested heavily in Android and Windows-based Voice recognition in anticipation of Mobile and Tablet search growth

Mobile, Tablet and PC search queries 2010 - 2014

PC search should continue to dominate, but Mobile and Tablet are also high-growth

• •

Google owns estimated 90% of mobile query share

25% of Android searches are already Voice

Sources: Morgan Stanley; Microsoft

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendix

Voice technology overview

Speech recognition is based on the Hidden Markov Model (HMM), with a statistical approach enabling the technology to be “trained,” decision weighting adjusted to improve accuracy, and huge data sets ideally of examples of all variations of a spoken string. Since it is unlikely any two spoken terms by different people will match, the model statistically determines what was most likely said, and the process below takes place to enable spoken terms to convert to use for applications.

VoiceXML

VXML manages dialogue between person and device, and version 3.0 focuses on improved media control and synchronization, identification and verification capability, improved extensibility, and better multimodal input architectures via use of XHTML+Voice

Speech Recognition Grammar Specifications

SRGS identifies the sentence structure expected in the human voice responses

Semantic Interpretation for Speech Recognition

SISR extracts key information from voice inputs to create voice objects for applications, and examples include airfsearch integration with ITA data structures or converting phone-based restaurant delivery order data into a format for order processing applications

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendix

Voice technology overview

Speech recognition systems can be network (cloud)-based, embedded directly into phone operating systems, or a combination of both, each of which carries advantages and disadvantages.

Network-based Speech

Virtually unlimited processing power enables more robust capabilities in handling large vocabulary requirements, complex continuous speech processing, and natural language inputs.

Key challenges revolve around latency in data transfer, and a quick and accurate experience on mobile devices. However, both should continue to improve consistently as technology improves.

Embedded Speech

Often preferred since response times can be faster than network-based speech and performance is not subject to network connectivity. Though phone technology will improve and many applications are suitable for embedded speech, large vocabularies and spontaneous speech require processing and memory not yet available.

Hybrid or Distributed Speech

Hybrid systems combine embedded and network-based processing, offering an advantage over a straight network approach as the extraction performed on the device reduces complexity that can increase errors.

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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Point of View

Appendix

Voice technology provider segments

Mobile platforms with proprietary speech Microsoft Windows Phone 7 Google Android Apple iPhone / iPad (iOS)
• By owning the phone platforms and default search applications, they could essentially control the voice search experience and market • But by owning ITA Software, only Google could create seamless voice search integration with airfare and potentially hotel data structures

Speech providers with mobile apps Vlingo Nuance Loquendo Promptu
• Travel intermediaries or suppliers could partner with them, or they could develop their own travel-specific applications • Must market to travelers to bypass default mobile search applications • Promptu owns ProntoTreno, a voice-interactive train services and booking application in Italy, and Flights2Go, an airline services app

Speech technology infrastructure IBM
• AT&T Watson technology is a key component of Vlingo • Travel intermediaries or suppliers could partner with them
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AT&T Watson

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

Point of View

About Lenati

About Lenati We are an award-winning boutique consulting firm that designs, implements, and optimizes marketing and sales solutions for companies that want to build stronger customer connection. Based in Seattle, Lenati was recently named one of the “Seven Small Gems of the Consulting Profession” by Consulting Magazine.

About the Author Jonathan Alford brings over 14 years of experience in consumer travel and lifestyle business, technology and finance. His specialties include business strategy, online and mobile marketing strategy, and global finance. He is a graduate of The Johnson School at Cornell University and the University of Virginia.

2825 Eastlake Ave E #210, Seattle, WA 98102 | (800) 848-1449 | www.lenati.com

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