Google buys travel software company for $700M

Jul 01, 2010 By MICHAEL LIEDTKE , AP Technology Writer
Internet giant Google announced on Thursday that it was buying ITA Software, a flight information software company, for 700 million dollars in cash.

Google Inc. plans to buy travel technology company ITA Software Inc. in a $700 million deal that would enable the Internet search leader to steer more of the airline reservations booked on the Web.

The all-cash deal announced Thursday signals Google's intention to challenge flight-comparison services that are ITA customers, including Kayak, FareCompare, Hotwire and Microsoft Corp.'s Bing . The deal is likely to face tough federal scrutiny.

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

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.

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.

Bing has been picking up more traffic with features that help people figure out whether the prices of airline prices are likely to increase or decrease. Like other search engines specializing in travel, Bing checks multiple sites at once for the best deals and sends users to those sites to book there.

The deal is likely to be scrutinized by federal antitrust regulators, given that Google already reigns as the Internet's most powerful company. The 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 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.

Explore further: Why the Sony hack isn't big news in Japan

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Google will 'fight' for AdMob: Schmidt

May 20, 2010

Google is prepared to "fight" if US regulators seek to block the Internet giant's purchase of mobile telephone advertising company AdMob, chief executive Eric Schmidt said Thursday.

FTC looking into Google's AdMob acquisition

Dec 23, 2009

Web search and advertising giant Google said Wednesday that the US Federal Trade Commission (FTC) is seeking more information about its proposed purchase of mobile advertising company AdMob.

FTC clears Google purchase of mobile ad service (Update)

May 21, 2010

(AP) -- Federal regulators have approved Google Inc.'s $750 million acquisition of the mobile ad service AdMob despite worries that the deal will enable Google to extend its dominance of Internet marketing ...

Google CEO discusses China, mobile at meeting

May 14, 2010

(AP) -- Google Inc. CEO Eric Schmidt seems more interested in keeping the peace with China than with Apple Inc. and other rivals in the rapidly growing smart phone market.

Microsoft encourages antitrust scrutiny of Google

Feb 28, 2010

Microsoft Corp. on Friday made its case publicly for increased antitrust scrutiny of rival Google Inc., while deflecting criticism that one of its European properties helped spur a local investigation of the Internet search ...

Recommended for you

Why the Sony hack isn't big news in Japan

2 hours ago

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

7 hours ago

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

8 hours ago

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

2012 movie massacre hung over 'Interview' decision

22 hours ago

When a group claiming credit for the hacking of Sony Pictures Entertainment threated violence against theaters showing "The Interview" earlier this week, the fate of the movie's big-screen life was all but ...

Clooney slams skittish Hollywood after Sony hack

Dec 19, 2014

Film star George Clooney slammed the Hollywood movie industry for failing to stand up against the cyber threats that prompted Sony Pictures to cancel release of the movie "The Interview."

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.