Google Buys ITA Travel Software Co. For $700 Million Cash, Dings Bing
- by Laurie Sullivan @lauriesullivan, July 1, 2010
The tools will allow people to search for flights, verify options and price, and get the consumer quickly to a site that allows them to buy the ticket. The idea is to drive more traffic from the search engine to airline Web sites.
Google wants to improve the way that flight information gets organized, which "creates a big engineering challenge," Google Chief Executive Officer Eric Schmidt told analysts and reporters during a conference call.
Schmidt described ITA as a flight-information software company founded by Massachusetts Institute of Technology (MIT) scientists. They have a technology that organizes flight data, including availability, time and prices. Many online travel Web sites, agencies and airlines use the platform called QPX. He says "more than half of all the airline tickets are sold online."
Experian Hitwise estimates that 597,139 search terms for all search engines tracked sent traffic to travel Web sites for the four weeks prior to June 26, 2010. The data firm says 4.37% of all traffic to travel sites came from search engines during the same four weeks. The majority of those searches -- 25.06% -- were two-word searches, and one- to four-word searches accounted for 80.55% of travel searches.
The most recent available data from Google search shows that 54% of travel searches have between three and four words in the query, but that has likely changed in the last year as people become more comfortable searching on a string of words.
Travel is one of the more difficult search problems to solve, according to Marissa Mayer, Google vice president of search product and user experience. Google needed a dedicated set of data to explore the travel space and build out tools that enable consumers to find and compare plane ticket prices and destinations. The search engine doesn't expect to build a platform similar to Kayak or allow people to purchase tickets through the search engine, but it will design algorithms built into tools that allow consumers to search on difficult queries such as "Where can I get within seven hours for $100?"
The future of search utilities is not in links but in actions, according to Aaron Goldman, principal at Connectual. In the book "Everything I Know about Marketing I Learned From Google," scheduled for release this fall from McGraw-Hill, he explains how the future for search remains in search-and-act engines or "app-ssistants" like Siri, acquired by Apple, that allow consumers to give instructions rather than submit queries and deliver actions not just links.
"If you're planning a trip you can just tell your app-ssistant 'Chicago to New York for pleasure' -- it will fetch you an itinerary with airlines, hotel, car rental, dinner reservations, theater tickets, etc., all based on your saved preferences," Goldman says. "In this example, a product like ITA is critical to gathering and organizing much of the data needed to complete the action."
The deal should also help Google gain share from Microsoft Bing, which has been gaining kudos from advertisers related to the travel industry.
For advertisers, the advantages are a little less obvious, Goldman says. "Long-term, search-and-act engines will provide tremendous opportunities to brands that have digitized and distributed their assets so app-ssistants can find them and include them in the actions they deliver," he says. "Short-term, ITA likely means more traffic to Google, and importantly, more commercial queries that advertisers love because they represent someone who is ready to make a purchase. For Google, more commercial queries mean more ad revenue."
