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It's Official - Google Is Now Part of the Travel Ecosystem

How Google - ITA could be the travel technology game changer

It is now official! Google is now set to become an integral part of the Travel Ecosystem! The Department of Justice on Friday, April 8, cleared the Google acquisition of ITA Software. I have been writing about Google's strategic intentions on this blog. ITA Software is a Cambridge, Mass. USA based travel technology company which specialises in product portfolio comprised of "Pricing and Shopping", "Passenger Services" and "Data Aggregation". It serves a number of major Airline Travel customers including American Airlines, Southwest Airlines, United Airlines, Continental Airlines, Bing, Kayak, and Orbitz. Combining Google's Search, Email, Collaboration, Location and Map services with the smart travel algorithms from ITA may lead to a number of exciting opportunities for Google and Travellers. Equally this may translate to challenges to other travel technology companies. Hence this approval does not come without DoJ preconditions, checks and balances. In order for Google to proceed with this acquisition, the department will require Google to develop and license travel software, to establish internal firewall procedures and to continue software research and development.

The department said that the acquisition, as originally proposed, would have substantially lessened competition among providers of comparative flight search websites in the United States, resulting in reduced choice and less innovation for consumers. Even before this development Google search engines is already collecting revenue from airlines and other travel suppliers for online advertising. In an interesting development usual fierce competitors such as online travel sites, like Expedia, Hotwire, Kayak, Travelocity and TripAdvisor have formed a coalition, called "Fair Search" (fairsearch.org/), to combat the perceived threat posed by a Google-ITA combination. The DoJ has addressed it to great extent while approving this deal. The department said that the proposed settlement will protect competition for airfare comparison and booking websites and ensure those websites using ITA’s software will be able to power their websites to compete against any airfare website Google may introduce.

Google's vision behind the acquisition is progressive. Google Blog outlines this as, "How cool would it be if you could type "flights to somewhere sunny for under $500 in May" into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily". It has committed to let ITA’s customers extend their contracts into 2016.  It has also agreed to let both current and new customers license ITA’s QPX software on “fair, reasonable and non-discriminatory terms” into 2016 along with related commitments aimed at making ITA’s technology available to other travel sites.

As I have been writing before on this blog, this is an exciting development in the travel technology space. It opens up the ecosystem which is currently dominated by the GDS players. How exactly it will benefit the travelling passengers or new entrepreneurs to launch new innovative travel solutions is not yet known. The nirvana state from my perspective is the emergence of "Travel Apps Store" which will make creation and consumption of new Travel business and technology applications much more easy and interesting. Is Google - ITA a right step in that direction? Absolutely yes. Will Travel Tech players such as Amadeus, Expedia, Sabre respond with their own version of innovation and partnership. Most likely. The most anticipated development will be how Google's young and bold competitors such as Facebook and Amazon respond to this. Airlines and technology players such as SITA are already using Facebook in innovative fashion. But the Google ITA deal just takes the Travel Technology Ecosystem in different dimension and is certainly a game changer!

More Stories By Amitabh Apte

Amitabh is a business focused technologist with close to fifteen years of delivery and leadership experience in large scale enterprise IT. He specialises in business and technology strategy definition, governance, architecture as well as methods and tools. Currently he is the Chief Technology Officer in Fujitsu Services Private Sector Division in the UK&I.