Google is now in the flight information business. The search giant just announced it is paying $700 million in cash for ITA Software, an essential provider of flight information to airlines, travel agencies, and online reservation systems. ITA raised a massive $100 million series A back in 2006 from Sequoia, Battery Ventures, and General Catalyst.
Travel is a huge segment of search and online commerce. Purchasing ITA signals Google’s intention to build out its travel search in a major way. A consortium of rivals including Microsoft, Kayak, Expedia, and Travelport tried to counter Google’s offer last Spring because they all rely on ITA’s data and wanted to keep the company out of Google’s hands. ITA was reportedly holding out for $1 billion, but Google got the deal at the original $700 million price it put on the table.
If you search for flights on Google today, all you get is links to results from the big online travel sites. Bing, on the other hand, offers a much richer Travel experience, complete with comparison prices for the same flight from the different travel engines, as well as predictive charts and graphs from Farecast (which was acquired by Microsoft for $115 million in 2008). Bing also gets a lot of its flight and fare data from ITA.
Google will use ITA’s data to create “new flight search tools” and promises to honor its existing agreements with partners. But can you imagine Bing paying Google for flight data? When that contract comes up for renewal, the negotiations will be anything but straightforward.
ITA Software is an airline IT and services provider at the forefront of a new generation of technology that is changing the way the travel industry works. Combining advances in computer science, innovative problem-solving, and deep industry knowledge, the companyâ€™s solutions deliver improved power and flexibility to the travel industry and greater efficiency for airlines, travel distributors, and passengers.
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...