Google Inc.?s pending acquisition of flight information software company ITA Software Inc. for $700 million could have a significant impact on travel bookings driven by mobile search.

The deal will allow Google to pursue the creation of new flight search tools that will help users find flight information on the wired and mobile Internet. Google pursued the deal with an eye toward ITA's QPX business and the opportunity to work closely with current and future customers.

?Google is buying ITA to create a new, easier way for users to find better flight information online,? said Andrew Pederson, spokesman for Google, Mountain View, CA. ?By combining ITA?s expertise with Google?s technology, we will be able to build new flight search tools for users that will make it easier for them to search for flights, compare flight options and prices and get them quickly to sites where they can buy their tickets.

?Because we have just announced our agreement to acquire ITA, we don?t have detailed plans to share,? he said. ?We hope that by offering a better experience for users, our flight search tools will attract a comprehensive group of airlines, online travel agencies and other industry players to participate.?

Google claims that it will honor all existing agreements and looks forward to adding new partners.

ITA Software claims that its platform for organizing flight information was hailed as a catalyst for change in the online travel industry. Its algorithms create a customizable flight data organization tool used by both airlines and online travel agencies.

ITA's QPX software tool for organizing flight information is used by airlines and travel distributors worldwide, including Alaska Airlines, American Airlines, Bing, Continental Airlines, Hotwire, Kayak, Orbitz, Southwest Airlines, TripAdvisor, United Airlines, US Airways and Virgin Atlantic Airways.

Both companies have approved the transaction, which is subject to customary closing conditions.

Impact on mobile search
Google is always looking to complement its various businesses with acquisitions, and the travel vertical is a lucrative sector.

?Google is all about providing relevant content and search results, and travel information and content is one of the most popular search verticals,? said Kerry Cannon Jr., CEO of interactive Mobile @dvertising Inc., Westport, CT.

?It makes total sense that Google would want to be deeply engrained in such an important?and information-rich?process such as flight search,? he said.

While mobile search is growing tremendously, mobile travel booking is lagging.

According to PhoCusWright, the U.S. travel industry is estimated to reach $291 billion in 2010, with $90 billion to be transacted online, yet only $160 million will be booked through mobile devices.

Travel transactions?especially booking an airline ticket?have so many variables.

So how could this acquisition impact mobile search, specifically consumers looking to book travel using their Web-enabled handsets?

?The online travel agencies and meta-search engines do a great job of displaying complex matrices of search results on a PC screen, but have not figured out how to serve those results effectively through mobile devices,? Mr. Cannon said.

?That is going to change as more and better booking tools and applications are developed for the handset,? he said.

The mobile search model is opposite to the traditional online search.

Online search is based on the funnel concept?a lot of information in the top that gets refined down to the precise results one is seeking.

But due to screen size and speed issues, mobile search should be looked at more as an upside-down funnel. 

The mobile user can only view, process and make decisions based on a smaller search result, which can be expanded as needed.

?Google?s acquisition of ITA may offer them the tools to provide extremely precise search results that will provide a more satisfying experience for the mobile user,? Mr. Cannon said.

Google has the potential to reap many benefits from the acquisition, but it makes even more sense given its competition with Microsoft?s Bing for both online and mobile search.

Could this be a threat to travel intermediaries? Andreas Pouros, chief operating officer at Greenlight, a London-based independent search marketing agency, certainly thinks so.

Although Google has stressed it has no plans for a direct move into selling travel services to the public, Mr. Pouros said that travel intermediaries should be very concerned as Google moves towards becoming central to consumers? travel purchasing behavior.

According to Mr. Pouros, it is only a little over seven months ago since Google made a similar move with property intermediaries.

However, Mr. Cannon is not so sure, and in fact sees the move directed more at competing with Microsoft?s Bing.

?I don?t think this represents a threat to the online travel agencies or traditional travel distribution channels?rather, it enhances them,? Mr. Cannon said.

?The net-net of this is that since Google does not appear to be getting into the flight booking arena, the can deliver even more qualified leads to these intermediaries,? he said.

?This is probably more of a threat to meta-search companies like Kayak or Bing.?

Final take

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