After a long, drawn-out bidding process, Google has finally scooped up ITA for $700 million.
Reports of the bidding war for ITA first surfaced in April. From what I understand, Google first approached ITA with a cash affer (in the $700 million) range, but then ITA’s Internet travel partners freaked out about the prospect of Google owning their chief travel-software provider. Other companies in the bidding included Orbitz and Kayak.
This deal is going to cause a lot of competitive hand-wringing because Cambridge, Mass.-based ITA, which has 500 employees, supplies travel software to a lot of Google competitors, including Orbitz and Microsoft’s Bing. It is widely anticipated to be challenged along anticompetitive lines, though Reuters today quoted law experts as saying it’s not likely that the deal will be blocked.
Google’s CEO Eric Schmidt says that Google will honor all of ITA’s contracts and that its intention is to improve its travel search information, not get into the business of selling travel services.