Friday, July 2, 2010

Google Buy of ITA Creates Challenge For Travelocity

Google's acquisition of travel software firm ITA Software Thursday afternoon, in a deal worth $700M in cash, has the potential to create a major challenge for online travel booking site Travelocity, which is based in Southlake, Texas. ITA, a developer of travel booking and search tools, has been spurring an online travel arms race over the last few years, with Travelocity and other online travel bookings sites scrambling to match the technology at ITA, which was based on research out of MIT. With ITA's new owner--Google--there's now a question of how existing online travel sites will need to react to the biggest name in the Internet now potentially a competitor. Google said the acquisition of ITA software owuld allow the firm to "create new ways for users to more easily find flight information online"--but did not say if it intends to compete with online travel sites, and many of ITA's own customers. Google said it would "honor all existing agreements" with firms such as Alaska Airlines, American Airlines, Bing, Continental Airlines, Hotwire, Kayak, Orbitz, Southwest Airlines, TripAdvisor, United Airlines, US Airways, Virgin Atlantic Airways--all of whom use ITA's technology on their airline booking sites.