Google just announced that it has received permission from the U.S. Department of Justice (DOJ) to proceed with its acquisition of ITA Software, the Cambridge, MA-based company that specializes in providing ticketing and logistics services to airlines like United Airlines, Air Canada American Airlines and provides this data to major online travel agencies like Orbitz, Kayak and others. The acquisition, which was rather controversial in the travel world and came under heavy scrutiny by the DOJ, will likely close soon and allow Google to bring a wider range of travel services to its products.
As part of the agreement, Google will have to “let both current and new customers license ITA’s QPX software on ‘fair, reasonable and non-discriminatory terms’ into 2016.” It’s worth noting that some of Google’s competitors, including Bing, currently use ITA’s services. Because of this, the DOJ’s restrictions force Google to “implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA’s customers. The proposed settlement delineates when and for what purpose that data may be used by Google.”
Good for Google, But What About Orbitz and Co.?
What matters for consumers, though, is that this acquisition will allow Google to bring more travel-related services to its products. Currently, travel is one of the few areas where Google does not offer competitive products while Bing, for example, has made travel one of the core areas of its expertise. It’s quite possible that we will soon see a flight search feature in Google’s sidebar, for example, or the ability to see airfares when you type in a query like “EWR-CDG 5/14 to 5/21.”
On the other hand, though, it remains to be seen how ITA’s customers will react to this acquisition. For the next few years, ITA will have to honor its current contracts, but over the long run, company’s like Kayak, TripAdvisor, Orbitz and the various airlines that use ITA’s services will either have to look for other solutions or work with Google.
Quite a few of ITA’s customers are rather weary of working with Google and afraid that it will stop licensing ITA’s software. United Airlines and others, for example, uses ITA’s software to power the booking engines on their own sites. These company’s would have to look for other – and potentially inferior – solutions if this happens. Should Google decide to continue to license ITA’s software, though, chances are that the company’s expertise in search could actually enhance ITA’s current product line.
For now, Google’s users will likely profit from this move. As for ITA’s partners, though, which also have a lot of customers, we won’t know the exact extend of the ramifications of today’s decision until 2016.