Google has agreed to pay $700m to buy flight-information provider ITA Software so that the search giant can provide users with more-comprehensive information about prices, times, and destinations of commercial airline flights.
The all-cash deal is the latest attempt by Google to expand beyond its core web-search offerings. While CEO Eric Schmidt said it's too early to flesh out business models, the company said its embrace of the 500-employee firm located in Cambridge, Massachusetts would make it easier for people to comparison-shop for flights, and would drive more sales to online travel agencies.
ITA was founded in 1996 by computer scientists from the Massachusetts Institute of Technology. Its search algorithms for presenting customized flight data are already used to help several airlines run their reservation systems.
It wouldn't be surprising for the deal to face significant regulatory scrutiny from antitrust enforcers in the US and possibly elsewhere. Google's $750m acquisition of AdMob was held up by a six-month review from the Federal Trade Commission, which ended its inquiry only after Apple bought Quattro, the third-largest mobile ad network.
Google hasn't said how much time it expects for the latest deal to close. In an announcement, the company already appeared to be girding for a fight, insisting that under the deal Google wouldn't be setting airfare prices and had no plans to sell tickets to consumers. It also said existing market shares in the industry wouldn't change. ®