Google establishes its supremacy by investing in the travel industry

16/07/2010

The rumour has been spreading for weeks but it is now official: Google acquired the flight information software company ITA Software on the 1st of July for a tidy 700 million dollars.

This new merger will provide an easier way for users – passengers, airlines and online travel agencies – to find better flight information and compare prices online. ITA Software, founded in 1996 by MIT computer scientists, was an impulse for change in the travel industry with their innovative algorithms and vast airline industry expertise. One of their well known products is the QPX software tool for organising flight information.

The economic stakes are huge given that all the ticket sales will go through Google. This can explain this gigantic investment, representing the 2 ^nd biggest acquisition for the company. Moreover, according to an expert in the travel business, quoted by the press agency AP, American travellers will purchase up to 45 billion dollars worth of airline tickets; an amount that could reach 59 billion by 2014. But is this automatically coupled with the death of metasearch? It’s not that obvious. According to the PhoCus Wright’s Consumer Travel Report, this new entity will be “a catalyst for meta brands to mature beyond what has brought them to where they are now”. FareCompare, Hotwire, Kayak, Bing and so on will have to quickly develop new functionalities and features in order to keep their heads above the water. Anyway this transaction will surely be subjected to American regulators who will verify that the acquisition does not represent a threat for competition.

Google and ITA Software aim to improve the customer experience and build something new in the industry that has never been seen before. It is a great challenge for them to remain pertinent to travellers because “consumers who usually book online are significantly less likely to use search engines while shopping for travel, they go straight to the brands they already know” (Phocus Wright).

www.google.com

www.itasoftware.com