Google-ITA deal: How will it affect the way we travel?

A screenshot of ITA Software’s website.

When Google enters a new market, people are bound to start talking.

So the announcement that the search giant’s takeover of ITA can go ahead, albeit with conditions attached, should be at least of some interest to anyone who ever needs to book a hotel or a flight, and that’s most of us.

ITA is a U.S.-based ticketing software company that creates software for the travel and airline industry. 

ITA specializes in organizing airline data, including flight schedules, availability and prices. Their software is used by major travel websites TripAdvisor, Kayak, Orbitz and Expedia, as well as major U.S. airlines such as American Airlines and Southwest Airlines. 

When Google announced their acquisition of ITA in July 2010 for US$700 million in cash, existing travel sites cried foul — wouldn’t Google inevitably use its dominance in search to manipulate search results, weakening its competitors and ultimately raising costs for passengers and airlines?

Since then the Department of Justice has done some thinking and last week ruled that Google is allowed to carry on with the purchase, with some strings attached.

These include allowing existing ITA clients to extend their contracts into 2016 and building a firewall that prevents itself from accessing its competitors’ software, which runs on ITA servers.

Google also has to promise they will maintain and enhance the software in a manner consistent with ITA’s growth in the past. CNNMoney.com has more. 

Will it affect the way we travel?

But is Google going to turn the travel search market upside down or is this barely a ripple in the huge lake of online travel purchases?

There are signs that searches for hotel and flights will be Googlized to some extent. 

Website Search Engine Land published what they claimed were experimental frames of Google’s new search result pages. The pages reportedly list out advertisements of hotel prices when someone searches for a hotel listing.

Carroll Rheem, director of research for PhoCusWright, a travel industry research company, predicted that a Google travel portal may be on the cards in a recent blog post. 

But she doubts the acquisition will change mainstream traveler behavior.

In the blog post titled “Google – ITA: King Maker, Not Category Killer,” she points out that although Google’s buyout will allow it to break through rigid travel search structures, there is a chance that Google users will merely view it as a “mundane product enhancement” rather than a “game changer.”

“Many travelers are actually quite content with the structured path of today because they already know when and where they want to travel,” Rheem writes. 

“If search results return pages of irrelevant options, and/or users end up going to the sites they were going to visit anyway (they will still need to book somewhere else, after all), people will not engage. Who wants to add an extraneous step to the travel planning process?”

Meanwhile existing travel sites are content with the DoJ’s decision. 

Kayak chief marketing officer Robert Birge said in an interview on Bloomberg West: “We are specifically pleased because we asked to get assurances that we’d continue to have access to this product.

“We asked Google to get assurances that they would protect our proprietary technology, that they would have access to as part of this acquisition, and they said no,” said Birge.

“And today the Department of Justice acted in a way that is going to protect us.”

Birge had previously formed a coalition Fairsearch.org with other travel sites including Microsoft, and Expedia, in an attempt to block Google’s deal.

 

Apr 14th, 2011 | Posted in Travel
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