Google acquires ITA (airline management software)

Companies in Relationship

Google, ITA Software

Deal Facts

Initial Announcement Date: 7/10

Consideration: $676M in cash (Source: Google 10-Q)

Google signs a definitive agreement to acquire ITA Software. ITA offers Internet-based software to the airline industry. The company's products include: 1) QPX, airfare pricing management system for airlines and travel distributors; 2) RES, a passenger reservation management and departure control system. Sellers include Battery Ventures, General Catalyst Partners, PAR Capital Management, Inc., Sequoia Capital and Spectrum Equity Investors. Jeremy Wertheimer, ITA CEO, will lead Google’s ITA unit.

Strategic Implications

Google plans to develop search tools to help users find travel information more easily on the Web, including making it easier for travelers to compare shop for flights and airfares. Google doesn’t currently compete against ITA Software and therefore the deal is not expected to change existing market shares. ITA licenses its software to travel booking sites as well as to sites operated by individual airlines. Google added it would "honor all existing agreements, and we're also enthusiastic about adding new partners."

With ITA in its stable, Google is better positioned to compete with Bing (Microsoft's search engine). In fact, Bing uses ITA's technology to provide airfare information to its users. Currently, Google directs users searching for air travel data elsewhere.


Copyright © 2008-2015 George T. Geis. All Rights Reserved.