Travel deal Google faces regulatory turbulence (AP)

By MICHAEL LIEDTKE and JOELLE TESSLER, AP Technology writers Michael Liedtke and Joelle Tessler, Ap technology writers – 1 HR 57 min ago

SAN FRANCISCO – Google wants to become the hub of online travel, promising opportunities and better convenience by fusing wizardry of the Internet search leader with top Web fare tracker, ITA Software.

That has existing online travel sites such as Kayak, Expedia and Travelocity worried that they don't stand a chance to compete, a scenario that could lead to higher prices.

The Department of Justice of the United States is expected to soon decide whether to let Google Inc. buy IT for $ 700 million. The deal would give Google control over the software that has helped power systems, reservation of the major U.S. airlines and a fleet of fare-comparison services online over the past decade.

The review of Government could serve as a proof of how aggressively U.S. antitrust regulators intend Google police how the company uses the wealth and influence gained since its dominance in Internet search to expand into more profitable markets. The u.s. market for online travel bookings amounted to approximately 80 billion per year, according to Forrester research.

Google says IT owns, the brainchild of computer scientists specializing in artificial intelligence at the Massachusetts Institute of Technology, would lead to lower prices and most convenient ways to purchase tickets on the Internet. For example, travelers could tell Google what they could afford to spend a warm place to visit on certain dates and the search engine would turn into a tourist guide.

But critics argue that Google would be able to interfere with other travel services to bury them in its search results or denying their latest technical innovations of the ITA. Google has promised only honour all contracts in progress of ITA, which expire in the next few years.

"Google will leverage over the entire flight online industry," said Thomas Barnett, a former head of the antitrust Division of the Department of justice. A lawyer in private practice, Barnett has become Expedia Inc., who banded with services such as Microsoft Corp. 's online travel. Bing, Travelocity, Kayak Software Corp. and Farelogix Inc. oppose the deal ITA.

Google has promised not to sell tickets or make other travel arrangements on its own site. Rather, Google sends people elsewhere to purchase the tickets and reservations for hotels and car rental. These sites are earning commissions.

But competitors say there is no guarantee about who would get the traffic. Google, for example, you may simply send visitors directly to the selected airline or hotel and ignore the existing referral and reservation services, denying their commissions.

Online travel companies also fear that Google would place its recommendations for travel on top of its search results page, influential, put them in a situation of disadvantage.

Google has already been accused of promoting their services — such as mapping, video and finance — in its search results. The company says that users prefer these services. But European regulators and the Attorney General of Texas have opened investigations for Google's business practices.

As a sign of his influence, Google already many fields travel requires that its search engine represents an estimated 30 percent of traffic to travel sites. ITA technology could allow Google to attract a greater share of travel research.

Google, however, it seems less interested in doing commissions. Rather, it seems to want to improve the results of the trip, so that I can keep users and sell more ads. According to some estimates, travel advertisers account for about 10 percent, or nearly $ 3 billion, Google's annual revenue.

The fear is that if Google Gets a larger share of searches, it would be better placed to command higher ad rates from airlines, hotels, rental car agencies and other leisure facilities.

Top searches for fares would even Google spend additional insights when people are planning to travel and how much money you are willing. What about data that the company could sell advertisers, said Forrester Research Analyst Henry Harteveldt travel.

Not all opponents of the agreement are based on ITA. Expedia, for one, uses its own software, while the other two services companies, travel and Hotwire, TripAdvisor depend ITA. Other important services that have no need of ITA include Travelocity, which uses the Sabre system and Priceline.

Google believes that these alternative tools show there would still be a large competition if it takes control of ITA.

But IT is the most comprehensive database because of its links with most major U.S. airlines, said Robert Birge, chief marketing officer of Kayaking. ITA also has the best system to track the most recent changes as regular carriers tariffs, tracking Birge said.

"Having access to data that no one else has, ' he said. "Know which airline seats are available for what price right now."

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Tessler reported from Washington.

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Online:

Google topics for approval:

http://www.Google.com/Press/ITA

Opposing the deal sites travel: http://www.fairsearch.org