Not one to be left out of any party, especially parties that make money, Google is buying ITA, one of the major travel data analysis firms that sites such as Kayak and Cheapflights.com use to parse and suggest travel options to consumers. Cnet provides a nifty chart from Google that explains how this popular business works, and highlights why this purchase is likely going to be controversial.
Whereas Bing, Kayak, Orbitz, and Travelocity get their travel data from the second tier, the analysis firms, Google is buying one of the analysis firms (ITA) and attempting to skip that step altogether. This would possibly give them a major leg up in the travel pricing market, as their data is closer to the source. It's unclear whether Google's acquisition of the firm will mean exclusivity to the service, blocking other search sites from using ITA's data.
ITA, which is being bought for $700 million, was created by MIT students who came up with some new and unique algorithms to analyze travel data and figure out how to best match up cheap fares to willing customers. Google plans on using ITA's services to enable travel booking directly from their search engine. Travel searches were already a large part of Google's repertoire, but accurately matching up a potential traveler to the booking he or she actually needs would necessitate a search query much too complicated for the average user to handle. Marissa Mayer, Google Vice President of search products and user experience, explains.
"Google has already come up with new ways to organize hard-to-find information like images, newspaper archives, scholarly papers, books, and geographic data. Once we've completed our acquisition of ITA, we'll work on creating new flight search tools that will make it easier for you to search for flights, compare flight options and prices, and get you quickly to a site where you can buy your ticket."
Google isn't downplaying the obvious controversy that the purchase will stir up. CEO Eric Schmidt says that he expects to be reviewed by government regulators, and wants to make his intentions crystal clear to preempt any bad publicity. Google has launched a website that explains why this is good for the consumer and why it isn't anti-competition. Schmidt is aware that regulators have somewhat itchy trigger fingers after the FTC's controversial decision to let Google's $750 million AdMob acquisition go through, and he knows that he needs to be utterly transparent and squeaky clean about the deal if he wants it to pass untouched.