By Stefanie Hoffman, ChannelWeb, July 05, 2010, 1300 hrs
Google has plans to make its first foray into the online travel information business with the impending purchase of ITA Software for $700 million in cash.
Specifically, the ITA acquisition will give search engine giant Google a leg up in the online travel information industry, allowing advertisers to specifically target travel-minded users.
'Their technology opens exciting possibilities for us to create new ways for users to more easily find flight information online, and we're looking forward to welcoming them to Google," said Google CEO Eric Schmidt in a statement.
However, the impeding deal will likely draw heavy criticism from regulators and other travel industry players who might have concerns that Google will achieve an unfair advantage over competitors relying upon ITA Software for information.
ITA provides a major source of information about airfares to aviation industry giants such as American Airlines, and Continental Airlines, as well as travel agents and discount sites such as Hotwire, Kayak, and Orbitz. ITA is also used by Microsoft in its competing search engine Bing. Google beat out competing bidders Expedia, Kayak.com and Travelport, according to Reuters.
Meanwhile, Microsoft is trying to hold its ground in the search business after it launched rival search engine Bing last year. Among other things, Microsoft's search engine touted a competitive advantage from rivals, including Google, with its ability to provide accurate up-to-date information on the lowest airfares.
ITA Software achieved a $100 million in venture capital funding from Sequoia Capital, and the deal marked another Google acquisition backed by the firm, which also was one of Google's original investors. Other Google acquisitions backed by Sequoia funding include mobile phone advertising firm AdMob and YouTube. |