Google Inc. the world’s largest Internet search company is moving into the travel market by purchasing ITA Software for $700 million in cash. ITA Software is a U.S.-based company established by a group of MIT computer scientists.
“What we’re going to do is build new flight search tools that focus on end users,” said Google Chief Executive Officer Eric Schmidt.
ITA has a computer-based service platform that enables fares, flight, and journey times to be utilized by airlines, travel agents, and online travel providers such as AMR Corp’s American Airlines, Continental Airlines, Hotwire, Kayak, Orbitz, and Microsoft Corp.’s Bing. This acquisition gives Google the capability to interact more directly with users in this area.
On a conference call on Thursday, Google executives called the deal “pro-competitive” and “pro-consumer,” but said it expects that U.S. regulators will examine the deal’s implications closely said Reuters.
The Mountain View, California-based Google beat Microsoft and other travel competitors to acquire ITA.
Schmidt also released a statement about the company’s intentions of enhancing the current ITA tools to provide more efficient products for users to comparison shop for flights and airfares and build upon the current successful offering.
“Search is even more important today than ever,” Google’s Schmidt said today on a conference call discussing the transaction. “In looking at travel, and airline travel in particular, I think you can see that airline travel and search are a perfect opportunity for more innovation, more investment, more interesting products.”
This deal marks the sixth largest acquisition for Google’s history.
According to research from ComScore Inc. Google had more than five times the online search share of Microsoft’s Bing in the U.S. in May.
Although Google verified that it also intends to move into online accommodation bookings that would integrate with its Google Maps product, they had no plans to sell airfares to consumers directly.
Andrew Gavil, a law professor at Howard University in Washington, in an interview with Bloomberg said it’s unlikely the ITA acquisition will scrutinize with “significant antitrust concerns.” “The purchase is a progressive step for Google’s business and not necessarily an example of one competitor buying another, a circumstance that would draw attention from authorities,” Gavil said.
Brian Pitz from UBS AG argues otherwise, given Google’s dominance in the Internet search space, the ITA Software Inc. product could be perceived to be skewed in favor of the company.
Nevertheless, Schmidt welcomes “significant review” from authorities before the acquisition is formalized.
As of July 2010 Google has bought 73 companies. The ITA deal is listed as the 13th acquisition in 2010 and highlights Schmidt’s promise to acquire a company a month this year.
“What we’re going to do is build new flight search tools that focus on end users,” said Google Chief Executive Officer Eric Schmidt.
ITA has a computer-based service platform that enables fares, flight, and journey times to be utilized by airlines, travel agents, and online travel providers such as AMR Corp’s American Airlines, Continental Airlines, Hotwire, Kayak, Orbitz, and Microsoft Corp.’s Bing. This acquisition gives Google the capability to interact more directly with users in this area.
On a conference call on Thursday, Google executives called the deal “pro-competitive” and “pro-consumer,” but said it expects that U.S. regulators will examine the deal’s implications closely said Reuters.
The Mountain View, California-based Google beat Microsoft and other travel competitors to acquire ITA.
Schmidt also released a statement about the company’s intentions of enhancing the current ITA tools to provide more efficient products for users to comparison shop for flights and airfares and build upon the current successful offering.
“Search is even more important today than ever,” Google’s Schmidt said today on a conference call discussing the transaction. “In looking at travel, and airline travel in particular, I think you can see that airline travel and search are a perfect opportunity for more innovation, more investment, more interesting products.”
This deal marks the sixth largest acquisition for Google’s history.
According to research from ComScore Inc. Google had more than five times the online search share of Microsoft’s Bing in the U.S. in May.
Although Google verified that it also intends to move into online accommodation bookings that would integrate with its Google Maps product, they had no plans to sell airfares to consumers directly.
Andrew Gavil, a law professor at Howard University in Washington, in an interview with Bloomberg said it’s unlikely the ITA acquisition will scrutinize with “significant antitrust concerns.” “The purchase is a progressive step for Google’s business and not necessarily an example of one competitor buying another, a circumstance that would draw attention from authorities,” Gavil said.
Brian Pitz from UBS AG argues otherwise, given Google’s dominance in the Internet search space, the ITA Software Inc. product could be perceived to be skewed in favor of the company.
Nevertheless, Schmidt welcomes “significant review” from authorities before the acquisition is formalized.
As of July 2010 Google has bought 73 companies. The ITA deal is listed as the 13th acquisition in 2010 and highlights Schmidt’s promise to acquire a company a month this year.
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