July 2, 2010

Google To Buy ITA Software for $700M

Google Inc. (NASDAQ: GOOG) will try to dominate the online e-commerce travel market the way it has come to dominate cellphone operating systems with its Android product. In other words, it is impossible to tell whether its buyout for ITA Software will ever bear fruit financially.

The price is $700 million. ITA is an important provider of software specializing in organizing airline data, including flight times, availability and prices.Google said the 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 ITA products are critical to most airline and travel e-commerce sites, which means that companies such as Priceline.com Inc. (NASDAQ:PCLN) and Orbitz Worldwide Inc. (NASDAQ:OWW) will be unhappy.

The deal is almost certain to be reviewed by The Justice Department. Google clearly plans to aggressively push itself into something that has been other people’s business.

No comments:

Post a Comment