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Google puts ITA buy to work with airline ticket site

By Hiawatha Bray
Globe Staff / September 14, 2011

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In a major challenge to the travel industry’s leading websites, Google Inc. launched a new service yesterday that allows users to shop for plane tickets as easily as they type an Internet search.

The service is based on technology from ITA Software Inc. of Cambridge, which Google acquired in April for $700 million.

Since May, Google has offered a search feature that lists available flights between cities, but it did not enable searchers to purchase tickets. At the new site, located at www.google.com/flights, users can easily sort flights by travel date and time, ticket price, or airline. A user who chooses to book a flight is directed to the airline’s own website, for which Google collects a fee.

Airline analyst Henry Harteveldt was not impressed with his initial experience with Google’s new flight search tool. The search results are inconsistent and incomplete, he said, and the booking button doesn’t transfer the user’s travel dates and destinations onto an airline’s website

“As with everything Google they focus too much on the technology and not as much on the interface design,’’ said Harteveldt, cofounder of Atmosphere Research Group. “This is not a product that is ready for prime time.’’

Yet there is still a benefit for consumers, who now have another option for comparing flights.

“Google is the most-used search engine, and we know that a considerable number of travelers use search engines in their travel planning, so Google is certainly in the pole position to capture this traffic,’’ he said.

Carroll Rheem, director of research at PhoCusWright Inc., a travel industry consulting firm in Sherman, Conn., said Google’s flight search service is a significant threat to Kayak.com and other rival flight booking services such as Expedia.com and Travelocity.com. “It’s the day all the online travel agencies have been dreading,’’ Rheem said.

Fearing the Internet search giant would dominate online travel, a number of travel websites formed a coalition in October to persuade federal authorities to prevent Google from buying ITA. US Justice Department officials approved the acquisition only after Google agreed to a number of restrictions aimed at preventing the company from seizing too much of the online travel market.

Among the websites that opposed the ITA deal was Kayak.com, a Norwalk, Conn., company with a major software development facility in Concord. Yesterday, Kayak chief marketing officer Robert Birge said his company is well-positioned to fend off its newest competitor. “We know Google is a very prominent brand, but we also know they haven’t been successful in everything they’ve done,’’ Birge said. “Right now, we’re very confident in our ability to compete.’’

Birge said Kayak would be protected by the array of restrictions that federal antitrust officials imposed on Google before permitting the company to buy ITA. Rival companies had complained that they depended on ITA software to run their own sites, and Google might block their access to future versions. Also, ITA had access to huge amounts of information about the travel companies that use its software, and those companies wanted that data kept out of Google’s hands.

The Justice Department required Google to pledge that it would keep selling ITA software to its competitors at reasonable prices, and that it would continue to improve the software and sell the improved versions to those rivals. Google must also set up security protocols to ensure it cannot get access to data from rival companies and is also barred from cutting deals that would prevent airlines from sharing their flight data with other travel sites.

On a posting on one of the company’s corporate blogs yesterday, Google engineering director Kourosh Gharachorloo said the search results are not influenced by financial relationships with airlines.

Gharachorloo also said the features at the new site were not completely rolled out.

For instance, users can only search for flights between a few US cities, including Boston, and they will only get results for round-trip, economy-class flights. And many search results did not include an option to buy a ticket.

Rheem said that the new Google service could be welcome news for airlines which have been searching for ways to slash the fees they pay online travel agents. American Airlines, for instance, has sued the online site Orbitz.com, claiming it charges too much.

Rheem said that if enough consumers use the Google service and bypass sites like Orbitz, the airlines will be in a better position to demand fee reductions.

But Rheem also said the major travel sites provide comprehensive services Google does not offer, like the ability to book hotel rooms and reserve rental cars. Besides, they buy lots of advertising, a revenue stream Google doesn’t want to lose, she said.

The big travel sites will eventually be invited to join Google’s flight search service, Rheem predicted.

“I would expect that you would have the option to choose where you want to book,’’ she said, “whether it’s an airline or an online travel agent.’’

Either way, Google will get paid.

Hiawatha Bray can be reached at bray@globe.com.