Travel sector lines up to oppose Google-ITA purchase

October 26, 2010: 2:01 PM ET

The leading travel booking sites have created a website, Fairsearch.org, which details their opposition to the search giant entering their domain.

Update: Dan Primack is also covering the story on the Term sheet.

Fairsearch.org (not to be confused with 'fare search' - get it?) is a website put together by the major players in the online travel industry which urge the government to block the $700 million acquisition of flight booking company ITA by Google (GOOG) announced in July.

Companies lined up against Google's acquisition of ITA

As you can see, most, if not all of the major players are there including those that currently use ITA's software to power search results.  ITA's software powers major booking engines like Orbitz, Kayak and Microsoft's (MSFT) Bing amongst many others.  The group claims that if Google takes over ITA, transparency, competition and innovation in the industry will be impacted.

Online travel bookings accounted for $80 billion of the $210 billion in e0commerce in 2009.  That's 3.25 times Amazon's (AMZN) sales.  That's expected to rise to $111 billion in 2014.

According to Fairsearch, Google hasn't committed to renewing contracts with its members and behind the scenes, the airlines are also opposed to the deal.

Analysts already expect a government regulators to dive deep into this acquisition.

Google posted a response on the company's public policy blog today.

Our reason for making this acquisition is simple: ITA will help us provide better results for our users. When someone searches for "flights from San Francisco to London," we'd like to provide not just "ten blue links" but exact flight times and prices as well -- just as our competitors do today.

Fairsearch press release follows:

Online Travel and Technology Companies Launch FairSearch.org Coalition,

Urge Justice Department to Challenge Google-ITA Deal

FairSearch.org Created to Protect Competition, Transparency and Innovation in Travel Search

WASHINGTON, D.C. – October 26, 2010 – Leading online travel sites and travel technology companies have formed the FairSearch.org coalition to support competition, transparency and innovation in online search. The coalition is urging the Justice Department to challenge Google's proposed $700 million acquisition of ITA Software, the flight search technology that powers many of the web's most popular travel sites, including KAYAK and Hotwire. Acquiring ITA Software would give Google control over the software that powers most of its closest rivals in travel search and could enable Google to manipulate and dominate the online air travel marketplace. The end result could be higher travel prices, fewer travel choices for consumers and businesses, and less innovation in online travel search.

Members of FairSearch.org include Expedia Inc., and its brands Expedia.com, Hotwire and TripAdvisor; Farelogix Inc.; KAYAK, and its brand SideStep; and Sabre Holdings, and its brand Travelocity.

"ITA's technology has made it the software provider of choice for many online players throughout the travel industry, including a number of Google's competitors in air travel search," said Steve Hafner, CEO and co-founder of KAYAK. "We founded KAYAK to give travel consumers access to more choices and lower prices, but this deal could result in just the opposite."

ITA provides the technology behind 65 percent of all carrier-direct online flight searches in the U.S., and its flight search software powers six of the top ten air carriers in the U.S. Some of ITA's most well-known U.S. customers include American Airlines, Continental Airlines, Hotwire, KAYAK, Orbitz, Southwest Airlines, TripAdvisor, United Airlines, US Airways, and Virgin Atlantic.

Today, Google is the source of more than 30 percent of all search engine traffic to online travel sites, delivering more visitors than any other search engine, the primary way Internet users navigate to U.S. industries online, according to Experian Hitwise. Google is also the dominant provider of online search, controlling more than 70 percent of U.S. searches, according to Experian Hitwise.

"Combining Google and ITA – the dominant providers of web search and flight search technology, respectively – raises some serious concerns for travelers and the online travel industry as a whole," said Dara Khosrowshahi, CEO of Expedia, Inc. "We support this coalition because we believe consumers

deserve transparency, and that they – not search engines – should choose winners and losers in online travel."

Thomas Barnett, who served as Assistant Attorney General in charge of the Justice Department's Antitrust Division from 2005 to 2008 and who serves as counsel to Expedia, said Google could use ITA Software to stifle competition in online flight search and to extend its dominance in Internet search into search for online travel, which is the largest segment of e-commerce.

"ITA plays a crucial role in online flight search and has been a key driver of competition and innovation in online travel," said Barnett. "The Justice Department needs to thoroughly investigate the proposed acquisition and to take whatever action is necessary to prevent harm to consumers in online flight search as well as online travel search more generally."

For more information about the FairSearch.org coalition, news updates about Google's proposed acquisition of ITA Software, and more information on the deal, please visit http://www.fairsearch.org.

# # #

About FairSearch.org

FairSearch.org is a group of businesses united in support of a healthy Internet future, where greater consumer choice and economic growth are driven by competition, integrity and innovation in online search.

Members of FairSearch.org include Expedia Inc., and its brands Expedia.com, Hotwire and TripAdvisor; Farelogix Inc.; KAYAK, and its brand SideStep; and Sabre Holdings, and its brand Travelocity.

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Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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