Internet giant Google has announced another significant acquisition: the company has announced it plans to acquire ITA Software for some $700 million in cash. ITA develops the reservations systems used by many of the world’s major airlines as well as many online travel services, including Orbitz, Hotwire, Bing Travel, FareCompare, and others. By taking ownership of ITA Software, Google isn’t just getting into the online travel business, it’s looking to control the systems that fuel many of its competitors’ services.
“Today, almost half of all airline tickets are sold online,” wrote Google’s VP for search products and user experience Marissa Mayer, in Google’s corporate blog. “But for many people, finding the right flight at the best price is a frustrating experience; pricing and availability change constantly, and even a simple two city itinerary involves literally thousands of different options. We’d like to make that search much easier.”
ITA spun out of MIT in 1996, and its software helps run the reservation systems for major airlines like American, Southwest, Continental, and Alaska Air. The airline industry’s broad use of ITA software means Google’s acquisition will receive heavy regulatory scrutiny from the federal government: some industry watchers forecast it may take up to a year for Google’s acquisition to be approved by regulators.
If approved, Google’s acquisition of ITA will help the company improve the quality of its travel-related search results and potentially compete head to head with firms offering online flight reservations, ticket purchases, and trip planning. However, most expect Google to leverage the ITA acquisition to improve its travel search results and offer more specifically-targeted advertising alongside those search results.