When I read this headline in an article in Businessweek this morning, I was amazed. ITA is the company that created the software for Kayak.com, one of the best online travel sites for searching for the lowest fares & rates. Additionally, they are used by other major companies such as Orbitz, Bing, Continental Airlines, and Alaska Airlines. (click for full article)
Why is this important? Because Google will enter the travel industry with a big bang. Not only will they be able to track your online search tendencies, but they will also be able to track your travel preferences as well. This means there could be more online advertising opportunities in the future from Google. This could also mean higher advertising rates as well. It will be interesting to see how this plays out. Hopefully, it will mean better targeted ad campaigns for the advertiser.
Great post, Peter! I guess it’s not really surprising…I’m hearing that many IT biggies are lining their war-chests with money to look for similar leverage buys. There was an article in yesterday’s WSJ about SAP and others selling bonds to build up funds in anticipation of finding such companies (such as ITA) to snap up. With interest rates still on the low side, it makes sense–especially if you’re going to try to compete with the cash-rich guys.
April – You bring up a good point. Google has been on a tear lately in acquiring companies. Will this fuel a ton of M&A’s in the online industry? Difficult to predict, but I don’t think Google is done. Thanks for sharing!