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

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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

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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 SISR QPX fare search

Analyzes voice input Semantic Interpretation for Voice objects matched to
using Speech Recognition Speech Recognition extracts data structure for fare search
Grammar Specifications key travel terms to convert to query and result processing
(SRGS) to translate to text voice objects

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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

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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 Speak or Touch to Speak or Touch to

to search select airline select flight

Potential Voice
search to
booking path Airline / OTA
Booking
path

Speak or type Inefficient Re-select Flight result

Re-enter terms in multiple fields
to search text links “Flight” 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

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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 Speak or Touch to Speak or Touch to

to search select airline select flight

Potential Voice
search to
booking path Airline / OTA
Booking
path

Open app Multiple text, calendar, Flight result Flight detail Choose OTA
or drop-down fields matrix or list 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

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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

Technology elements Google advantages

Android currently outperforms

Travel lends well to speech
recognition – demonstrated in
Defense Dept tests 1991-1995
candidate for mobile voice
Smartphone penetration,
processing power, and dual
microphones growing rapidly
Cloud enables network-based
speech to process larger
vocabularies than embedded apps
Microsoft and Vlingo for natural
language voice search of travel terms
Travel is a strong
In a short period of time, 25% of
search and multimodal Android searches are already Voice
engagement
Google has invested heavily to train
speech algorithms
Google-ITA will have the
tools to execute it
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

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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 Speech platform Fare query platform

Android Android ITA Software

Windows Phone 7 MSFT Speech /

Tellme
Travelport ePricing

iPhone Siri Amadeus Meta-pricer

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

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 Sample testing shows Android advantage
Point of View
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”

Key term mean search mean mean error

Platform Noise level success rate WER Queries time (sec) words words
Android loud - Starbucks 30% 29% 20 7.4 12.4 3.6

Android quiet - office 85% 4% 20 3.7 13.2 0.6

Windows Phone 7 quiet - office 70% 7% 20 4.9 13.2 0.9

Vlingo quiet - office 10% 15% 20 3.5 13.2 2.0

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.

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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

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 Appendix
Point of View
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

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

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 Appendix
Point of View
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
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 Appendix
Point of View
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 WER
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 0%
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 27%
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 13%
Fly from Seattle to Anchorage August 25 returning August 28 Alaska Airlines flights from Seattle to Anchorage Aug 25th returning August 28 Alaska Airlines 0%
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 17%
Search round-trip flight St. Louis to Phoenix January 5 to 9 round trip flight St. Louis to Phoenix January 5th 29 17%

Vlingo was worse than expected at this point

Spoken search string Text result WER
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 14%
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 7%
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 20%
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 8%
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 25%
Search round-trip flight St. Louis to Phoenix January 5 to 9 search round trip lake saint louis to phoenix january fifth 29 17%

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 Appendix
Point of View
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

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 Appendix
Point of View
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.

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

Speech Recognition SRGS identifies the sentence structure expected in the human voice responses
Grammar Specifications

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

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 Appendix
Point of View
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.

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

Often preferred since response times can be faster than network-based speech and performance is not
subject to network connectivity.
Embedded
Speech 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
Hybrid systems combine embedded and network-based processing, offering an advantage over a straight
Distributed network approach as the extraction performed on the device reduces complexity that can increase errors.
Speech

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 Appendix
Point of View
Voice technology provider segments

Mobile platforms with proprietary speech

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

Speech providers with mobile apps

Vlingo • Travel intermediaries or suppliers could partner with them, or they

could develop their own travel-specific applications
Nuance
• Must market to travelers to bypass default mobile search applications
Loquendo
• Promptu owns ProntoTreno, a voice-interactive train services and
booking application in Italy, and Flights2Go, an airline services app
Promptu

Speech technology infrastructure

IBM • AT&T Watson technology is a key component of Vlingo

AT&T Watson • Travel intermediaries or suppliers could partner with them

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 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.

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