Google ITA Acquisition Hit With Opposition From Travel Sites

If a coalition of online travel sites formed Thursday get their way they will block Google's proposed $700 million purchase of ITA Software, which provides flight data.

Expedia, Kayak.com, Sabre Holdings and Farelogix formed the coalition FairSearch.org in an effort to persuade the Justice Department to block Google's deal to buy ITA. The group claims it would give Google control over the software that powers most of its closest rivals in travel search, and could enable Google to manipulate and dominate the online air travel marketplace. Google responded in a blog post.

If the deal goes through, the group claims that consumers could see higher travel prices, fewer choices, and less innovation in online travel search. A person in the know for the coalition declined to speak on the record, but pointed to a published comment from Robert Birge, chief marketing officer at Kayak, that suggests the group had approached Google with concerns, but the Mountain View, Calif. company declined requests.

advertisement

advertisement

Randal Picker, professor at the University of Chicago School of Law, has not been following Google's acquisition of ITA, but says in general it's not the responsibility of the opposing party to try to compromise with the acquiring company prior to filing a complaint. "Sometimes the DOJ wants to sit down with the parties to determine if the acquiring company needs to make changes to the acquisition, selling off that division or this branch to make the deal go through," he says.

Search engines remain the No. 1 planning source for online travelers. A study released earlier this year by Google and OTX suggests that 84% of people will use the Internet to plan for personal travel this year, up from 79% in 2009. Business travel sits at 79% and 74%, respectively.

Most people use the Internet to research an upcoming trip, followed by brainstorming or beginning to think about a trip, and others find reading reviews from other travelers helpful. The Google and OTX study interviewed 5,000 U.S. online users between April and June 2010 who identified themselves as personal or business travelers.

Still, the coalition suggests that Google's acquisition of ITA will propose major threats to competition and consumers. The group cites the most recent numbers from the Interactive Advertising Bureau, which suggest that leisure travel related to airfare, hotels and resorts has been growing -- accounting for $1.5 billion advertising last year, up from $1.4 billion in 2008.

Google says it wants to provide consumers with more relevant and useful content related to travel. The coalition believes these empty promises will only serve to fuel Google's dominance in the search market, which today stands for more than 70% of U.S. searches, according to Experian Hitwise.

ITA provides the technology behind 65% of all carrier-direct online flight searches in the U.S., and its flight search software powers six of the top ten air carriers in the U.S., according to the coalition. Some of ITA's U.S. customers include American Airlines, Continental Airlines, Hotwire, KAYAK, Orbitz, Southwest Airlines, TripAdvisor, United Airlines, US Airways, and Virgin Atlantic.

Experian Hitwise estimates more than 30% of all search engine traffic to online travel sites -- delivering more visitors than any other search engine, the primary way Internet users navigate to U.S. industries online.

1 comment about "Google ITA Acquisition Hit With Opposition From Travel Sites".
Check to receive email when comments are posted.
  1. Henry Harteveldt from Forrester Research, October 27, 2010 at 8:20 a.m.

    There is some merit to the concern of the travel sites. They have a right to know how their data will be kept confidential, and they deserve to know whether they will be allowed to renew their contracts.

    However, there is also an element of disingenuous behavior in the agencies' opposition. Expedia, for example, has a product called Best Fare Search that it uses for low fare search. They could potentially choose to license this to third-parties. Expedia was also rumored to be interested in bidding for ITA Software. There are also other airfare search tools from firms that include Amadeus and Everbread which the travel agencies could potentially use.

Next story loading loading..