Google shakes up the travel industry

On July 1st, 2010 Google announced it would buy ITA software, the leading source of critical air fare software used by search engines and travel sites alike, such as Hotwire and Air Canada Vacations. The question is, how will this affect the consumer?

FairSearch.org is a group of businesses united in support of a healthy Internet future, where greater consumer choice and economic growth are driven by competition, transparency and innovation in online search. This organization has taken the position that if Google were to buy ITA Software it would threaten the competitive online travel search market and could limit the competition and innovation that benefits consumers. Experts fear that if this is approved, consumers can expect to face higher prices and less choice when searching for travel online.

Some feel that acquiring ITA will give Google control over the search algorithm software that today powers most of Google’s closest rivals in the travel vertical. Additionally it is feared that this would give Google incentive to direct Internet traffic away from travel search rivals through the use of its search and search advertising dominance. Suddenly online travel companies could find themselves appearing much lower in the results list of a Google search. For more on this side of the story, take a look at this video:

The other side of the Argument

Google suggests that this transaction will create a new, easier way for users to find better flight information online which is expected to encourage more users to make their flight purchases online. They suggest that this 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. They will not be setting airline prices and have no plans to sell airline tickets to consumers. Because Google does not currently compete against ITA Software, they suggest that the deal will not change existing market shares. To see more of the other side of the argument, watch this video: