Giant Step Into Travel For Google
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New Google tools to help people search easily for flights are now on the runway. It will be up to antitrust regulators to decide whether they can take off.
Google said Thursday that it had agreed to acquire ITA, a 14-year-old flight information software company, for $700 million in cash.
Google said it planned to create flight search tools on Google.com, a move that could upset the entire $132 billion-a-year air travel industry as well as its rival Microsoft.
The deal is another significant step by Google away from how it has traditionally conducted business. Instead of pointing searchers to the most relevant Web sites, the company is increasingly giving information directly to users in categories like shopping or local services like restaurants. Providing information on flights and fares would be a new area for the company.
With 63 percent of the American search market, Google has recently drawn scrutiny from antitrust regulators every time it has moved into a new business. Its acquisition of AdMob, a mobile advertising firm, won approval by the Federal Trade Commission after an intensive six-month review, and only after a rival, Apple, undermined possible objections by introducing a competing mobile ad network. The government has also examined Google's scanning of millions of out-of-print and hard-to-find books.
Antitrust enforcers previously reviewed and approved Google's 2007 acquisition of Doubleclick, and were prepared to block a proposed deal with Yahoo in 2008 before Google walked away.
Eric E. Schmidt, Google's chief executive, predicted a "significant review" of the ITA acquisition. He told analysts and reporters Thursday in a conference call: "We think they will spend a fair amount of time going through it, trying to understand it, both because of size and price. We welcome that."
Samuel R. Miller, an antitrust lawyer at Sidley Austin, said: "I would think antitrust enforcers will take a very hard look at this. Every time Google makes another acquisition, it only reinforces the argument that they are basically trying to acquire other companies that may present potential competition to their core dominance in paid search."
Google does not compete directly with ITA, but many of its largest rivals in the travel search market, including Microsoft, use ITA's data.
First Published July 2, 2010 2:00 am
