Google moves into online travel business

Google, the world's most popular search engine, is expanding its reach in the lucrative online travel business.
In March, Google added hotel links to its Maps application, listing hotels with room rates available to some users.

Google also is reportedly in talks to pay $1 billion to acquire ITA Software, which develops fare-shopping software for online travel agencies, airlines and fare-search-only sites, such as Bing Travel and Kayak.

Incorporating fares into Google search results would keep customers more engaged in its applications while they plan for travel, a prospect that could unnerve other fare sites. Users would be able to type in their destination and travel dates, and see flights and prices.

Now, Google users can plug in dates and cities, but only get links to other booking sites, such as Orbitz, Expedia and Hotwire.

Google declined to comment about the acquisition talks. But, says Google spokeswoman Victoria Katsarou, "We always have travel in mind. We're trying to make it easier for our users."

The potential acquisition, if completed, "would be a game changer and a clear signal of Google's interest in travel," says Steve Kaufer, CEO of TripAdvisor.

Analysts say Google is interested in providing information but not offering bookings. Google relies on advertising revenue from online travel agencies and has said in the past it doesn't want to engage in transactions. "I doubt Google would ever want to take a reservation," Kaufer says.

Norm Rose, president of Travel Tech Consulting, says Google will likely rely on other sites for buying tickets. "If you hear that it's bad news for online travel agencies, it's premature," he says.

But if Google moves to offer fare results, it could threaten shopping sites that similarly provide only fares. "It could be difficult for sites like Kayak to maintain competitiveness," Rose says.

Kayak didn't reply to a request to comment.

Google's interest in fare information may have been triggered by Microsoft's acquisition of Farecast two years ago, Rose says. Using Farecast's software, Microsoft introduced a travel site in its latest search engine, Bing, that stood out from the pack by providing predictions on whether fares would rise or fall.

Bing's Mike Fridgen says Google is "clearly the No. 1 referral to travel sites today."

Noting Bing Travel's growth since it was launched last year, Fridgen says about 60% of travel shoppers start travel planning with a search engine.

Google has an array of tools available that would make shopping for fares different from shopping for them on other sites.

For example, Google could choose to display fares on its global map, allowing armchair travelers to browse through fares from their home city, Rose says.

It could also expand offerings in travel itinerary management, in which travelers can store all their reservations, he says. "There has to be another piece to this," he says.

Meanwhile, Google's mobile phone operating system, Android, is gaining in popularity. And Google Maps allows users to tailor it for their trips and provides public transportation information.

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