News

Microsoft Battling Google on ITA Search Acquisition

• By Kurt Mackie
• 12/13/2010

Microsoft has joined a coalition of companies that is fighting Google's plans to acquire Cambridge, Mass.-based ITA Software, a maker of search software that tracks commercial airline flights.

FairSearch.org, the coalition opposed to the $700-million acquisition, issued press release (PDF) today stating that Microsoft had joined the group, along with three other new members. Those other members include UK-based search company Foundem, Paris-based online travel agency Level…com and Singapore-based online travel company Zuji.

The coalition also includes existing members Expedia.com (formerly owned by Microsoft), Farelogix Inc., Kayak and Sabre Holdings. Sabre Holdings owns Zuji through its Travelocity brand.

FairSearch.org argues that Google's acquisition of ITA Software will dominate travel search in a way that's bad for air travelers. It claimed that ITA's software powers "65 percent of all online flight searches at airline Websites in the U.S."

"Acquiring ITA Software would give Google control over the software that powers most of its closest rivals in travel search and could enable Google to manipulate and dominate the online air travel marketplace," the FairSearch.org press release states. "The end result could be higher travel prices, fewer travel choices for consumers and businesses, and less innovation in online travel search."

Google proposed the acquisition of ITA Software back in July. At that time, the company contended that the acquisition would lead to flight-search improvements for online travel agencies, airlines and passengers. Moreover, Google claimed it would not sell airline tickets.

"Google will honor all existing agreements, and we're also enthusiastic about adding new partners," the company said in a July press release about the ITA Software acquisition plans.

Henry H. Harteveldt, a vice president and principal analyst at Forrester Research, gave a thumbs-up to the Google acquisition deal in a July blog post. However, Harteveldt, who isn't a lawyer, noted that the deal could be concerning if airlines or online travel agencies (OTAs) had to pay Google a fee to be listed in search results.

"Only one approach will be acceptable: for all bona fide sellers' Websites to be presented within a flight search's organic results -- without charge to the airline or OTA," Harteveldt said.

Microsoft's Bing search service was initially marketed as a "decision engine" for consumers. It was designed specifically to help with decisions on travel, health and shopping, according to a Microsoft-produced video.