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Feds Approve Google's Purchase of ITA Software

Posted by Soulskill on from the fare-deal dept.

itwbennett writes "The US Justice Department has approved Google's $700 million acquisition of online flight-data specialist ITA Software, but with stringent conditions. From a DOJ press release announcing its approval of the purchase: '[I]n order for Google Inc. to proceed with its proposed acquisition of ITA Software Inc., 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 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.'"

41 comments

  1. ITA's future software credits (all in good fun) by intellitech · · Score: 1

    this has been a product by the umbrella google corporation.

    --
    vos nescitis quicquam, nec cogitatis quia expedit nobis ut unus moriatur homo pro populo et non tota gens pereat.
  2. In case you don't know it... by Noryungi · · Score: 1

    http://matrix.itasoftware.com/ is a very useful web site indeed.

    Think of it as Google for cheap flights.

    I hope Google does the right thing and keeps ITA alive: these guys knew their stuff.

    --
    The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
    1. Re:In case you don't know it... by ackthpt · · Score: 1

      Perhaps its more funding for the good ideas ITA has and will keep it going and bring it forward. But whatever happened to Google creating software like this? I thought of Google as an innovator, not an aggregator.

      --

      A feeling of having made the same mistake before: Deja Foobar
    2. Re:In case you don't know it... by Anonymous Coward · · Score: 1

      Google is no stranger to buying out companies that have products that fit in line with their search product.

      Allowing users to search for cheapest flights directly from Google is a service that integrates well with their product. It's a good acquisition for Google.

    3. Re:In case you don't know it... by zill · · Score: 2

      Maybe I'm expecting too much, but that is a terrible search engine, just like most other airfare search engines on the internet. When I have a specific queries like "On which days is the fare cheapest between airport A and airport B in 2012?", or "graph out all 68808 combinations of departure and return dates in 2012 so that I can pick my travel dates visually" these online search engines are absolutely useless in answering them.

      Most search sites do not let you search a date range, only specific dates. The rare sites that search nearby dates for you only search +- 15 days, instead of the +- 180 days that I want.

      ITA provides the backend solutions to almost the entirety of the airline industry in North America. Almost every online airfare search engine and every travel agency utilize their software in some way. Google may be just another evil corporation, but they're one of the most competent corporations out there, so I'm glad about their new purchase.

    4. Re:In case you don't know it... by Anonymous Coward · · Score: 0

      True, but Bing sucks.

    5. Re:In case you don't know it... by Lokitoth · · Score: 3, Interesting

      The problem with your query is that ITA (and the other GDS systems) have to query the individual airline systems to get at the rates - and caching is not effective except as at a "best effort/guess" basis, because rates change dynamically according to algorithms known only to the airlines themselves. That is why, as one gets closer to the date, the cost for any given ticket (same flight/seat-class) increases. This makes it completely ineffective to do a search like you suggest - you would only be able to get the engine's best guess, and it would only be applicable for a given day, or would not be applicable to any given day, but be an average for all days.

      Keep in mind, to do a single flight search across the various GDS' that Expedia is connected to, for example, takes on the order of 15 seconds. To answer your queries would require doing either all 68808 searches for round-trip, or 712 (if you are doing single flights and trying to manually connect them) searches. And that data would only be valid for a rather short interval of time, since flights can be sold out at any time, as as a flight gets closer to being sold out, ticket prices for that flight rise automatically.

      Google buying ITA will not magically improve this. The airlines realized that they are holding all the cards right now, which means that the little battle-of-wills they have going on between them and the GDSes is heavily skewed towards the airlines. There is a reason there is no longer any money to be made in commissions selling flights through GDS; lead generation is where money is being made (or dynamic packaging, but that is a completely different beast altogether), and that is where I imagine Google is going to go - which is why Kayak was so vocal about this move, since it would, in effect, be cutting them out of the equation - it used to be Kayak buys adwords for particular destinations, generates the search and collects lead generation fees from the airlines by forward to their (or some OTA) site. What Google proposes to do now is skip the first step - granted they will be losing adword revenue if their organic results increase in quality - but will be gaining lead-generation revenue, which likely offsets it, since the traffic funnel is much more qualified than the adword traffic may have been.

      Sorry for the ramble/stream-of-consciousness; been a bit frustrated with GDS systems over the past week, having to rewrite a fair bit of interfacing code.

    6. Re:In case you don't know it... by Local+ID10T · · Score: 1

      If its a good wheel, there is no need to reinvent it -just buy the existing one. If its a good concept, but a bad implementation, build a better one...

      --
      "You want to know how to help your kids? Leave them the fuck alone." -George Carlin
    7. Re:In case you don't know it... by Anonymous Coward · · Score: 0

      Ita actually does a lot more than that and avoids carrier calls a lot of the time.
      Hardly anyone has any idea of what ita and google are capable of, it will blow you away.

    8. Re:In case you don't know it... by Anonymous Coward · · Score: 0

      700mil is 7 days of work for Google.

    9. Re:In case you don't know it... by Anonymous Coward · · Score: 0

      Android was bought by Google, they didn't start it either...

    10. Re:In case you don't know it... by cavreader · · Score: 1

      Can't you search and find the cheapest flights now using any search engine? There are also dozens of existing travel services websites that contain all this info not to mention the carrier websites. So what's the real reason for Googles new acquisition?

    11. Re:In case you don't know it... by klparrot · · Score: 1

      Can't tell if sarcasm; ITA Matrix is one of the most flexible and powerful flight search engines out there.

      It's kind of useless to search for the cheapest fares in a whole year, because seat sales are often offered a month or two before the flight, not to mention most airlines only sell seats up to 11 months in advance. Use something like Airfare Watchdog if you want to hear when seat sales happen, then use ITA Matrix to pick dates and routes in the timespan that the seat sale is in effect.

      ITA Matrix also has an advanced routing language, which you can use to specify alternate airports, restrict what carriers will be used, what airports to connect through, how many connections to make (both minimum or maximum), what fare codes to use, etc.. I haven't yet found anything else like it on the web; I use it all the time to find flights that will maximize my frequent flyer mileage and minimize my cost.

    12. Re:In case you don't know it... by SnowZero · · Score: 0

      Absolutely; with google+ita, here are just a few of the things that are possible:
      Gigolo Tea
      A Legit Goo
      Agile Goto
      Go Toil Age
      I Go Eat Log
      Igloo Gate

      The possibilities that these could entail are almost endless.

    13. Re:In case you don't know it... by SmilingBoy · · Score: 1

      Can't you search and find the cheapest flights now using any search engine? There are also dozens of existing travel services websites that contain all this info

      of which a large part use ITA Software as backend!

    14. Re:In case you don't know it... by Anonymous Coward · · Score: 0

      Bing is just so damned gay. You bing, and I'll google, thank you very much.

    15. Re:In case you don't know it... by jschen · · Score: 2
      In the interest of full disclosure, I handled user support on ITA Software's search sites from April 2000 to March 2011. My leaving is due to a change in life circumstances, and has nothing to do with Google.

      Maybe I'm expecting too much, but that is a terrible search engine, just like most other airfare search engines on the internet. When I have a specific queries like "On which days is the fare cheapest between airport A and airport B in 2012?", or "graph out all 68808 combinations of departure and return dates in 2012 so that I can pick my travel dates visually" these online search engines are absolutely useless in answering them.

      If you search far enough into the future, there generally will be a very large number of travel dates (often the majority) available at the lowest fare. If you're reasonably flexible with your plans, you can find the lowest fare easily. It is easy to find the lowest fare that is currently bookable between airport A and airport B in 2012. Your choice of dates will be somewhat limited since it's still early in 2011, and airlines generally don't make itineraries bookable more than 330 days in advance.

      But what you probably really want is not just what the best fare is right now, but how to get the best fare if you have flexibility in both when to travel and when to book. It is impossible to know whether now is the best time to book that fare since fares and fare availability can change at any time in any direction. Airlines sometimes change fares multiple times in a day, and fare availability can change even faster. Furthermore, since these changes are in response to market conditions, even the airlines don't know when the lowest price will be.

  3. I for one... by Anonymous Coward · · Score: 0

    ...welcome our new google overlords.

  4. expect it to become by geekoid · · Score: 3, Insightful

    trivially easy to check for air flights, and book tickets at the best price in about 2 years.

    --
    The Kruger Dunning explains most post on /. http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
    1. Re:expect it to become by SirKron · · Score: 1

      Beta version in 12 months.

    2. Re:expect it to become by martin-boundary · · Score: 1

      Let's just hope best price == lower price.

    3. Re:expect it to become by Anonymous Coward · · Score: 0

      Yes, let's only pay the absolute minimum and thereby further dilute service standards.

      Did you know that airliners seats have to be rated for 20g deceleration? If we dispensed with those expensive contraptions then your fares would be a few fractions of a penny cheaper. Hurrah for cheapness!

    4. Re:expect it to become by bjb · · Score: 1

      Yes, let's only pay the absolute minimum and thereby further dilute service standards.

      Not sure I agree with this. I think this would be good simply because there is little in the way of price competition that I've seen lately. Sure, there are lower prices under certain situations, but otherwise the airlines are charging whatever the heck they darn well please. Oh, and shutting other companies out who try to offer cheaper service in some cases.

      Case in point: Eos airlines, who offered business class only flights. They had excellent quality and service standards. However, they charged less than American Airlines and they did this by various methods including using less expensive airports (in London, they used Stanstead airport instead of the more expensive Heathrow). AA didn't like this, so they moved in to Stanstead, pushed out Eos, caused Eos to go bankrupt and then shortly after their victory pulled out of Stanstead themselves. Now if you want to fly to London on business class you're back to the more expensive (and lesser quality) American Airlines out of Heathrow.

      So cheaper doesn't always mean lesser quality. However, it does motivate others to take action and sometimes it isn't in the best interest of the consumer.

      --
      Never hit your grandmother with a shovel, for it leaves a bad impression on her mind...
  5. I thought airlines are dropping booking websites by billrp · · Score: 1

    Southwest and American sell their tickets only at their own websites because they don't want to pay out commissions. If this is the trend, then where does ITA fit? Even if Google could search those sites through their APIs (if they have them), those airlines won't pay Google for referrals or "conversions" - so how does Google make money?

  6. Re:I thought airlines are dropping booking website by zill · · Score: 1

    Ads? Recommending related services? Keeping competitors out?

    Also keep in mind that a large number of google services do not make any money (as far as I can tell). For example google calendar and google scholar. Running these services only cost google a trivial amount of money.

  7. it has a familiar smell by Anonymous Coward · · Score: 1

    if a person p2ps a song in the midst of government collusion with the record companies, they get a $20K fine.

    if microsoft lies and colludes with the government to maintain a near 100% control of the desktop and office software market, and they are convicted, the judgement is thrown out.

    if microsoft buys control of a european handset maker, it's widely ignored.

    if google buys ip and patents related to airline search, they are tightly regulated and forced to license the core ip to all complainants.

    if google implements their own version of java to bypass snoracle's size-based ip trickery, they are sued.

  8. Re:I thought airlines are dropping booking website by ackthpt · · Score: 2

    Southwest and American sell their tickets only at their own websites because they don't want to pay out commissions. If this is the trend, then where does ITA fit? Even if Google could search those sites through their APIs (if they have them), those airlines won't pay Google for referrals or "conversions" - so how does Google make money?

    Same way they do everywhere else, those little strips of advertising along the top, left and right margins. These will just be targeted toward travel things "Fantastic Bargain On Dramamine!", "Bob's Discount House Of Malaria Treatments!", "Airsickness Cures R Us", "Need A Good Thick Book For Layovers? We Have Books With Over 2,000 Pages!", "Bucky Pillow Warehouse" .. etc.

    --

    A feeling of having made the same mistake before: Deja Foobar
  9. Re:I thought airlines are dropping booking website by Lokitoth · · Score: 1

    I cannot speak for Southwest, since I do not remember how it works with GDS, but American at least offers its tickets through the GDS system - though they do not pay commissions.

    One thing to consider, though, is that since people coming to their site from Kayak/ITA-powered searches can go directly to the flight that was found, the traffic is much more likely to do a booking than a general search for "flights" yielding an American or Southewest ad on Google. At that point, Google or Kayak can start demanding a toll for that traffic (lead-generation price), with the stick being that they would instead shunt that traffic to competitors' flights instead. And since Google and Kayak have a lot of eyeballs, it is a no-brainer for the airlines to pay for lead generation.

  10. Well then by Unknown+Lamer · · Score: 2

    There goes the market for Lisp programmers.

    --

    HAL 7000, fewer features than the HAL 9000, but just as homicidal!
  11. More importantly by pavon · · Score: 2

    Nearly all the other cheap airfare sites on the web use ITA's software (Orbitz, Bing, etc). The main concern with Google acquiring ITA wasn't that they would kill it - they fully intend to support it and integrate it with their other search offerings. Rather people were concerned that Google would cutoff all of ITAs current customers, or make them irrelevant by providing results directly in their search page.

  12. Oh goody by Anonymous Coward · · Score: 0

    Looks like another piece of software getting neglected. I expect more from a company full of PHD software developers, so fix all your other bugs before biting off more. Freaks. Thank you Federals. You just keep screwing us over. Hope you all shutdown today, and stay closed.

  13. Require Google to "continue software research..."? by Anonymous Coward · · Score: 0

    Here by I order the Sun to set at 8pm.

  14. Re:I thought airlines are dropping booking website by Anonymous Coward · · Score: 0

    they make the software that runs most of them.

  15. IMHO by jd · · Score: 1

    The threat is less from Google shutting the development down but in data mining (which is their only real specialty anyway) and the potential threats to privacy that may result. Firewall policies are of no interest here if the information is published (even if only to paying customers).

    --
    It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
  16. firewalls... by ohzero · · Score: 1

    So..... they didn't have any internal firewalls prior to this relatively small acquisition?

    --
    -- http://www.criticalassets.com
  17. skyscanner by Dr.Ruud · · Score: 2

    SkyScanner is currently my favorite to find flight ticket prices, but its interface was better some months ago when you could still easily spot that it would be much cheaper to have the same trip a few days earlier, etc. I am the "gimme an interesting city somewhere around mid-October" kind of traveler, no support for that much in the travel industry yet.

  18. ohz noz evil feds by nwmann · · Score: 0

    i do not believe those guidelines were stringent whatsoever

  19. How strange by GameboyRMH · · Score: 1

    When Google buys a flight booking site it's a big deal and the US government gets involved. But when Comcast buys NBC or AT&T buys T-mobile it's no problem?

    Also, inb4 bonch sees this and loses his shit!

    --
    "When information is power, privacy is freedom" - Jah-Wren Ryel
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    this is the site i bought, www.special-beats-headphone.com/ and the most importent is the attractive price, hope it helps you .

  21. Just curious by obliv!on · · Score: 1

    Did MS have similar restrictions placed on it when it bought Farecast?