Google's acquisition of ITA Software has closed
Despite being met with significant opposition in the travel search industry from companies that claimed buying ITA would give Google unfair power, the $700 million acquisition has cleared.
In what was a much more expedient process than many believed, Google's controversial plan to acquire travel search company ITA Software for $700 million is a done deal. After posting a blog entry on Friday that the deal was close to completion, Google added an update yesterday that said, "Our acquisition of ITA has now closed."
Google's announcement on Friday was that it hadover regulator concerns that Google would have too much power by owning ITA Software, which provides its travel search technology to companies like Kayak, TripAdvisor, and Bing as well as airlines like United Airlines and Virgin Atlantic.
"It's important to us that ITA continue with business as usual, providing great service to its business partners. We indicated last July that we would honor ITA's existing contracts," Google's blog post on Friday explained. "Today we've formally committed to let ITA's customers extend their contracts into 2016. We've also agreed to let both current and new customers license ITA's QPX software on 'fair, reasonable and non-discriminatory terms' into 2016--along with related commitments aimed at making ITA's technology available to other travel sites."
In other words, Google is required to keep things business-as-usual at ITA without instituting competitive measures--and the Justice Department is watching.
Numerous members of the travel search community, including Kayak and Bing, hadin an attempt to keep ITA independent. The FairSearch.org coalition seems to have been satisfied with the Google-DOJ deal.
"The Department concluded Google's unrestricted control over ITA's key flight search technology would have violated the antitrust laws," a statement Friday from the group read. "By putting in place strong, ongoing oversight and enforcement tools, the Department has ensured that consumers will continue to benefit from vibrant competition and innovation in travel search. While this enforcement action is an important victory, Google's abuse of its search dominance still threatens competition and consumers in many critical areas of online services. Antitrust enforcers and lawmakers in the U.S. and elsewhere must remain vigilant in their investigation of these larger concerns and take whatever further enforcement actions are needed to protect consumers."
Adam Goldstein, co-founder of tiny travel search start-up Hipmunk, seemed to think Google's settlement with the Justice Department would keep the travel search business more or less in the same position is it now--for the most part.
"I think what's going to happen is Google's going to build their own search site or search feature, or something like that but they're going to probably charge people who want be listed just like they charge people who want to be listed in search ads, and so people who could previously get leads basically for free through search-engine optimization are probably going to have to pay for those leads," Goldstein told CNET. "Given how expensive travel ads are online, I can imagine that may price out some companies that are used to getting things for free from Google."
He also pointed out that there are plenty of areas where Google could, in fact, make ITA better. "Google is known for having hundreds of thousands or millions of servers, and it's interesting to think what would happen if they took ITA and ran it on millions of servers," Goldstein told CNET. "You could probably get results that would have otherwise been impossible to find."
This post was expanded at 1:16 p.m. PT.