Google scoops up air travel data firm ITA Software

By Julie Johnsson
Posted July 1, 2010 at 5:32 p.m.

Google Inc. is poised to shake-up the online travel market with its $700-million acquisition of ITA Software Inc., whose search engine tools are used to power leading Web-based travel agencies like Chicago-based Orbitz Worldwide.

The all-cash deal announced Thursday would make Google a vendor to — and potential competitor of — many of the most prominent online travel sites, including,, Hotwire Group and Microsoft Corp.’s Bing Travel.

The deal is almost certain to face tough scrutiny from federal antitrust officials, given Google’s conflicted role and its clout as a sprawling Internet giant.
Since its inception a decade ago, Orbitz has relied on ITA technology to power its search of airline fares, hotel and rental car rates. Orbitz also markets extensively through Google and even uses Google Street View to let its users glimpse the exteriors of hotels they are researching.

“We have a great business relationship with both parties,” said Brian Hoyt, Orbitz spokesman. “However, we believe any deal of this magnitude will go through a robust review by the federal government.”

ITA Software, a 500-employee company created in 1996 by computer scientists at the Massachusetts Institute of Technology, sells technology that helps run the reservation systems of many airlines, including American, Southwest, Alaska and Continental. Its software also powers the tools that other travel websites use to track air fares.

Google is counting on ITA’s expertise to improve the quality of its search results when people are looking to make airline reservations or other travel-related bookings.

“There is clearly more room for competition and innovation” in online travel, Google CEO Eric Schmidt said in a conference call. “We will improve the way flight information is organized.”

Schmidt predicted the biggest winners in this deal would be consumers, but he also predicted Google would be able to drive more traffic to airlines and travel agencies such as Orbitz and Expedia. Google would profit from ITA’s technology by selling more ads alongside the flight data.

The deal is likely to be scrutinized by federal antitrust regulators, given that Google already reigns as the Internet’s most powerful company. The Federal Trade Commission conducted a six-month review before approving Google’s last big acquisition, a $750 million takeover of mobile ad service AdMob.
Schmidt did not predict when the deal might close, but said he expected Google would ultimately win approval after regulators take a “fair amount” of time to review the deal.

“We are pretty confident that this is pro-competitive and pro-consumer,” Schmidt said.
Google intends to honor all of ITA’s existing contracts if the acquisition is approved. It’s unclear whether Google would still want to work with some of its rivals after the contracts expire.

Federal Trade Commission spokesman Mitch Katz declined to comment. The Justice Department did not immediately respond to a message for comment.

Shares in Google rose 41 cents to $439.90 in extended trading Thursday after the announcement. Earlier, shares were down $5.46, or 1.2 percent, to close at $439.49.

With the Associated Press

Read more about the topics in this post:

Companies in this article


Read more about this company »


  1. Roger July 1, 2010 at 6:26 pm

    The biggest winners in this will be the ITA owners. Google has never excelled or succeeded at anything other than search ads. And their grip on this is slipping.

  2. JingleSong July 1, 2010 at 8:35 pm

    It’s time for the FEDs to get after Google. Enough already!