Facts about Google’s acquisition of ITA Software

Claims vs. Facts

Claim: The deal could result in higher travel prices or fewer travel choices for consumers.
Fact: ITA and Google are not competitors so there will not be less choice for consumers. In addition, ITA does not set ticket prices or sell tickets, but merely analyzes data about seat availability and fares — which are set by airlines — and provides that analysis to websites. So it’s hard to see why it would result in higher prices. In fact, by acquiring ITA we hope to build flight comparison tools that make it easier for users to compare prices and find the best possible deal.

Claim: Google is the source of 30 percent of all search engine traffic to online travel sites.
Fact: This statistic is misleading because there are many ways in which consumers navigate to travel websites, including typing the site’s address directly into their browser or clicking travel ads on a variety of websites. Based on our analysis and data from Compete.com, non-navigational traffic from Google (i.e., not including when someone types in a search query like [expedia] into Google) is responsible for only about 8% of traffic to the top ten travel websites.

In addition, Expedia CEO Dara Khosrowshahi commented that “the majority of, at least Expedia’s, and I believe Hotel.com’s traffic that comes from search to our site actually come through people searching for Expedia, for example. So in typing in Expedia in Google or so on, typing in Hotels.com in Google. So of the 25% for Expedia, for example, the majority of that traffic is someone who’s already looking for Expedia, and that person is going to find Expedia one way or the other because they are searching for something very specific.” (Expedia earnings call, 10/28/10)

Claim: ITA powers most of the web’s most popular travel sites.
Fact: ITA’s QPX tool powers many websites; that’s why we’ve said that we’ll honor all of ITA’s existing agreements, and that we are enthusiastic about adding new partners. That said, the three most popular travel sites in the U.S. (Expedia, Priceline and Travelocity) use data provided by ITA’s competitors. And over the past few months other travel companies have highlighted the alternatives to ITA. Kayak’s CEO called Expedia’s Best Fare Search alternative “awesome” and Continental Airlines noted that “there are alternatives to the [ITA] shopping solution in the marketplace, both internally and externally.”

Claim: Google will be choosing winners and losers in online travel.
Fact: Our goal is to build tools that drive more traffic to airline and online travel agency sites where customers can purchase tickets. We also believe that giving users better ways to search for flights online will encourage more users to make their flight purchases online, which will create more overall online sales for airlines and travel agencies. Google does not plan to sell airline tickets directly.

Claim: Instead of buying ITA, Google could just license its data.
Fact: We think we can make more significant innovations and bigger breakthroughs in online flight search for consumers by combining our engineering expertise with ITA’s than we would by just licensing ITA’s data service.

Claim: The deal will lead to less innovation in travel search.
Fact: Just the opposite! Today, finding the right flight at the best price is a frustrating experience; pricing and availability change constantly, and even a simple two-city itinerary involves literally thousands of different options. We’re confident that by combining ITA’s expertise in travel with Google’s technology we’ll be able to create great innovations in flight search.