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The More Things Change…

The game has changedYesterday, Expedia and Travelocity entered into a strategic alliance, with Expedia agreeing to provide its technology platform to Travelocity. Meanwhile, this morning, Microsoft announced CEO Steve Ballmer will return within the next 12 months. All of this on the heels of Yahoo beating Google’s traffic figures for the first time in 2 years.

Given that I’d talked about the pace of change in the digital environment during yesterday’s podcast, I couldn’t have planned this better if I tried (thanks, Expedia-locity and Microsoft!)

Anyway, all these changes got me thinking about how fundamentally today’s environment has shifted over the last couple of years and what that means going forward.

The Expedia-Travelocity hookup and Steve Ballmer’s pending retirement signal the end of traditional “Web 1.0” powers. Seriously. While I don’t think it’s particularly good for travel suppliers in the short run, Travelocity “throwing in the towel,” as Henry Harteveldt points out, also underscores the company’s failure to compete effectively against younger, nimbler rivals (largely due to poor execution, which I’ve talked about before as a real key to innovation; Henry Harteveldt makes a related argument in his piece, highlighting Travelocity’s under-investment in new products and services).

However, I don’t think this is a sign that Expedia will win, either. After all, Yahoo famously outsourced its search capabilities to Microsoft a few years ago, but neither company has really done much damage to Google in that space. Yes, Expedia might see some short-term benefit, but will those gains be enough to stave off heavy competition from Priceline,, or TripAdvisor? I seriously doubt it. At least not without continued innovation and investment in social and mobile tools for its customers.

Meanwhile in Redmond, Steve Ballmer has watched Microsoft’s AGFAM brethren Apple, Google, and Facebook dominate most emerging product lines (MS really only dominates with Xbox and its cash cow Office suite). And Microsoft’s stock has taken a beating during Ballmer’s tenure, falling over 40% since he took over as CEO (in fairness, he got the big chair at the height of the bubble 13 years ago). But the 8% jump in share price today on news of his pending retirement ain’t exactly a glowing endorsement of the soon-to-be-retired chief’s leadership.

Instead, these changes illustrate exactly how significantly the digital landscapes has shifted in the last few years. The companies focused on connecting customers using social and mobile and local search have surged to the forefront, while more established players have struggled to keep up.

Yes, Travelocity, Expedia, and Microsoft could get back in the game—just look at the job Marissa Mayer’s done at Yahoo over the last year. But they’ll only succeed by acknowledging that the playing field has changed… and by changing their game, too.

If you’re interested in learning more about the future of marketing on the social, local, mobile web, register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also enjoy some of our past coverage of the social, local, mobile web and what it means for your business, including:

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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