A while ago I wrote about how Google were making moves into the travel industry, and now they’ve gone one further with their upcoming purchase of travel software by ITA Software Inc. The tool essentially aggregates data from travel companies, which means that Google is on the verge of purchasing the biggest piece of travel software out there, pending approval from the U.S. competition authorities(which is to be expected for a deal such as this). Google CEO Eric Schmidt explained that the reasoning behind the deal was that many consumers are currently frustrated with the way to search for airline ticket prices online, with prices often fluctuating and presenting a frustrating user experience.

The diagram below from Google’s own press centre shows clearly how ITA operates in the process of travel search :

The threat

The fact is that many services use the data provided by the ITA, and Bing is one of them. They currently source their flight details for their online flight tracker in the US from the ITA and this is potentially a massive blow to their travel service. Bing has invested heavily in this area, providing flight predictions made possible through their acquisition of Farecast. Online travel is a big business, and with that comes search. With Google possibly owning such an important piece of software, Bing has certainly got to be worried. The threat also extends outside of search, as other travel companies use date provided by ITA’s software, such as Expedia, Kayak and Cheap Flights. Indeed, Kayak themselves were attempting to buy the ITA, but failed. The chief marketing officer of Kayak, Robert Birge, commented that the deal presented an area of concern, when you combine Google’s huge power of search, with the ITA’s airline relationships

Google have made no hints into moving into the online travel space directly, instead referring to the deal as a way to offer users more relevant search results, particularly for long-tail terms such as ‘what is the cheapest way to fly from Dublin to New York’. Providing relevant search is at the heart of what they do, not selling travel online. If this deal goes ahead however (and it likely will do), then this route is clearly attainable.

The business of travel search

A look at some stats provides some context into why Google is so intent on purchasing the ITA and, ultimately, providing the user with relevant search results :

151 million searches worldwide every month for the term ‘flight’

16.6 million searches worldwide every month for the term ‘cheap flight’

24% increase in Adword spend in the travel industry from April ‘09 to April ‘10

Over 4.7 million unique visits to Kayak.com

Google has been increasingly demonstrating their commitment to travel search over the past few months and this recent deal shows this in no uncertain terms. Quite how they will use the software and who will/won’t be allowed access to it remains to be seen. Google are focusing in on the user experience, not the fallout for competitors and I would have to say that the search for flights online is definitely something that can be improved.

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