Yahoo has had a successful travel portal partnership with Traveloicty for some time now. While Yahoo makes a fee on each sale ($5 I believe), it has been happy to just continue its partnership and not deal with the headaches of setting up its own system. Of course, this isn’t the way Google does things. If it wants to get into a market, it just buys a company, retools it and then attempts to take control of the entire marketplace.
On July 1st, Google announced that it had purchased travel software company ITA for its usual price of $700 million. (Google paid $750 million for AdMob, they seem to like this price range) Even though Google doesn’t currently have a travel tool, it has gotten so used to regulatory questions about its purchases that it decided to strike first this time and announce why it felt this purchase would move ahead without problems (emphasis theirs):
- Google’s acquisition of ITA Software will create a new, easier way for users to find better flight information online, which should encourage more users to make their flight purchases online.
- The acquisition will benefit passengers, airlines and online travel agencies by making it easier for users to comparison shop for flights and airfares and by driving more potential customers to airlines’ and online travel agencies’ websites. Google won’t be setting airfare prices and has no plans to sell airline tickets to consumers.
- Because Google doesn’t currently compete against ITA Software, the deal will not change existing market shares. We are very excited about ITA Software’s QPX business, and we’re looking forward to working with current and future customers. Google will honor all existing agreements, and we’re also enthusiastic about adding new partners.
Even though this won’t change the current percentages of the market, slapping the name “Google” on it probably will. While Google has had some mis-firings in its own products it creates in-house such as Buzz, it rarely messes up its acquisitions. Just take GrandCentral (now known as Google Voice) and AdMob for instance. The Big G getting into the travel business is sure to change some numbers, and companies such as Kayak, Cheap Tickets and so on had better be ready for it.
What say you? Would you book flights through Google?