Watch out Orbitz and Expedia, Google wants a piece of the travel turf. The ambitious search engine company is "in talks" to fork over $1 billion for ITA Software, which makes the same software that Bing and Kayak use to track airfares online, according to USA Today.
Obviously, the talk has the travel industry abuzz. The entrance of a behemoth like Google would bring tough name-brand competition to the business of hunting down budget-priced plane tickets. With the software, Google would be able to offer the same point-and-click fare searches when users punch in destinations and dates of departure. Currently, such a search on Google results in links to other booking sites.
Google, of course, would benefit handsomely if it follows through on the purchase. Consumers would be spending more time on its site and using its applications, thereby making the company's advertisers happy and willing to spend more.
Yet, industry analysts told USA Today that Google will likely stop short of offering actual bookings in order not to alienate the travel reservation sites that currently generate a nice chunk of advertising revenue for the company. After all, why kill the golden goose?
On the other hand, sites like Kayak, which do not take reservations, could be in for a fight. Google could combine its global map function and aggregated air bargains into a snazzy presentation so viewers can see all cheap flights departing from their local airport, the newspaper reported. And given its vast database and search capabilities, Google could also produce a more comprehensive itinerary organizer than anything out there.One analyst told AOL that Google could potentially cut into the business of booking sites such as Expedia, too. If Google's fare search were as effective as many believe it could be, consumers might shop on Google for the flights, then contact the airlines directly. The cheapest flights are often provided by individual airlines but finding them is time-consuming.
"You might find people sidestepping the online booking companies," said B. Starr McMullen, an Oregon State University economics professor who specializes in the transportation industry.
It should be noted that Google's reported desire to acquire the aforementioned billion-dollar ITA Software is still just talk (well, Google isn't talking). But it makes sense. Anything to keep you clicking in the Google environment means more profits for Google -- and that can make up for a billion-dollar purchase in no time.