To expand their efforts in travel search, Google has acquired ITA Software. ITA is a key player in the online travel business, providing data to companies like Kayak, Orbitz, Bing, Expedia, TripAdvisor, and a number of other air travel websites. According to Google, almost 60% of airline tickets are purchased online. ITA tried to hold out for a $1 billion, but Google snatched them up at their original offer price of $700.
In a post on the official Google blog, they explain that the current landscape of online travel search is cluttered, confusing, and frustrating. Even for a simple flight from point A to point B, you have to dig through hundreds or thousands of options to find what you’re looking for. Google aims to make this entire process easier.
While online flight search is rapidly evolving, we think there is room for more competition and greater innovation. Google has already come up with new ways to organize hard-to-find information like images, newspaper archives, scholarly papers, books and geographic data. Once we’ve completed our acquisition of ITA, we’ll work on creating new flight search tools that will make it easier for you to search for flights, compare flight options and prices and get you quickly to a site where you can buy your ticket.
Google CEO Eric Schmidt explained to the press that he believes Google can “help solve the online travel problem and help improve the online travel ecosystem.” He also say that Google could drive more business to airlines and offer an innovative approach to the online travel business.
Having the largest and most successful provider of search tackle the problem of searching for flight data seems like a good deal. Google is in a good place to make search easier for users and drive more sales to ticket sales portals. Many don’t see it that way, including the companies that rely on ITA’s services. They even attempted to counter Google’s offer.
Google promises to honor all existing contracts and is “enthusiastic” about signing new ones. They still faces the issue of the deal being killed by regulators. Schmidt is confident that the deal will go through. Google doesn’t own any of the travel segment at this point and is only stepping into airline travel, not hotels or rental cars. These factors may help them in getting the deal done. You can check out some facts on the merger here.
Do you think this deal will have a positive effect on the online travel market?