Yesterday, Google announced that it has signed an agreement to acquire ITA, a Boston-based software company specializing in organizing airline data, including flight times, availability and prices. The purchase price for the travel search firm was $700 million in cash, subject to adjustments.
Founded in 1996 by a team of MIT computer scientists, ITA’s technically advanced algorithms for organizing flight information have been hailed as a catalyst for change in the online travel industry. And its customizable flight data organization tool is used by leading airlines and travel distributors worldwide including Alaska Airlines, American Airlines, Bing, Continental Airlines, Hotwire, Kayak, Orbitz, Southwest Airlines, TripAdvisor, United Airlines, US Airways, Virgin Atlantic Airways and others.
Antitrust regulators still need to review the deal. But Eric Schmidt, Google’s chief executive, told Richard Waters and Jeremy Lemer of FT.com, “We expect this will go through.”
So, what does this mean to marketers?
D.C. Denison of The Boston Globe says, “Nearly 50 percent of airline tickets are purchased online. Microsoft’s Bing search service, which competes with Google, already has a prominent travel area that uses ITA software, and features tools like ticket price predictors.”
Gregory T. Huang, Xconomy’s National IT Editor and the Editor of Xconomy Boston, says, “It will be interesting to see how this move by Google affects the travel search space (especially sites like Kayak and Bing)–and whether we will all be going to Google to book our flights soon.”
And Tom Krazit of CNET News reports, “As it did subsequent to acquiring AdMob, Google prepared a Web site highlighting the benefits of the deal for users and downplaying any anticompetitive effects.”
You can check out Facts about Google’s acquisition of ITA software for yourself. The two key messages are highlighted in bold:
- “The acquisition will benefit passengers, airlines and online travel agencies by making it easier for users to comparison shop for flights and airfares and by driving more potential customers to airlines’ and online travel agencies’ websites.”
- Because Google doesn’t currently compete against ITA Software, the deal will not change existing market shares.
The online travel ecosystem