Google's Flying Start: Buying Airline Travel Software Company

Is Google getting into the online travel business? Google plans to buy ITA, a developer of airline travel software, for $700 million in a move that published reports said could raise new antitrust concerns about the Internet search giant.

In an announcement Thursday, Google said the acquisition would provide the company with a way to develop new airline flight and fare search tools. The ITA technology ’opens exciting possibilities for us to create new ways for users to more easily find flight information online,’ said Google CEO Eric Schmidt in a statement.

Google and privately held ITA have signed a definitive agreement for the acquisition, which Google said is subject to ’customary closing conditions.’ Google did not say when the acquisition would close.

’While online flight search is rapidly evolving, we think there is room for more competition and greater innovation,’ said Marissa Mayer, Google vice president of search products and user experience,’ in a blog posted Thursday.

’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,’ the blog said.

ITA was founded in 1996 by several MIT computer scientists, using what Google called ’innovative algorithms and deep airline industry expertise’ to develop its customizable flight data organization tool, which is used by both airlines and travel agents. The company has about 500 employees.

Google said it would honor all existing agreements Boston-based ITA has with its partners. Along with American Airlines and Continental Airlines, ITA’s software is used by Hotwire, Kayak, Orbitz and Microsoft’s Bing.

In a conference call Thursday, Schmidt said Google had no plans to sell airline tickets to consumers, according to a Reuters story. Google executives, however, said it was too early to say exactly how Google would use the ITA technology or make money from the flight data it provides.

The story said that rumors in recent weeks that Google was about to acquire ITA had unnerved travel industry players, who worried about Google moving into their markets. The story quoted Google executives as calling the deal ’pro-competitive,’ but still expecting U.S. regulators to closely examine it for potential antitrust implications.

The Reuters story said Google beat out Expedia, Kayak and Travelport, which also reportedly bid for ITA.