Expedia.com and a number of other travel websites are attempting to block Google’s acquisition of ITA Software, a buyout that would give Google access to real-time flight data.
Google is looking to acquire the flight data provider for around $700 million to fix its flight search engine. The deal seems innocuous enough — Google said it had no plans to sell plane tickets and would direct Google search users to other sites to purchase tickets. Still, a number of companies including travel search company Expedia and Microsoft, which runs search rival Bing, have launched the Fair Search Coalition to try and stop the acquisition.
There are already a number of travel sites that don’t sell plane tickets and instead direct users to Expedia and other travel sites. Hipmunk, a Y Combinator startup, and Sidestep direct users to other travel sites in exchange for a finder’s fee. Google plans to do the same. So why are Expedia and friends sweating over the deal and attempting to lobby congress to block it?
By delivering real-time flight data as an instant result to a search — much like when a search user puts a math problem in the search bar and gets a direct answer — Google adds another way to keep Internet browsers on its sites just a little longer. That means more ad revenue for Google and less for other travel sites.
Travel is a huge part of e-commerce — worth around $80 billion a year, according to the Wall Street Journal report. ITA’s software handles around 65 percent of all e-commerce flight bookings, and travel advertising accounted for about 6 percent of all online advertising revenue, according to the coalition’s website, FairSearch.org. Stealing just a small slice of that — which Google probably already owns a large part of — represents a significant financial gain.
Not all travel companies have voiced concerns over the deal. Priceline.com, a major competitor to Expedia, and some others support the deal, according to the report.
The whole hullabaloo started when the U.S. Department of Justice initiated an antitrust investigation in July, shortly after Google announced its plans to acquire ITA. There’s currently no timeline to indicate when the investigation will be completed or when the acquisition may finally be closed.