(Sources:The Independent, UK; CNN Money; Mashable; WSJ)

Today Google announced it will buy online travel software company ITA Software for $700 million cash, a move that positions the search giant in the highly competitive airfare market, pitting it against the likes of Bing Travel, Expedia and Kayak.

Boston-based ITA, founded in 1996 by a team of MIT computer scientists, specializes in organizing airline data, including flight times, availability and prices. Its data is used on a host of websites like Kayak, Orbitz, Expedia.com, TripAdvisor and Microsoft’s  Bing, as well as a number of airlines’ websites. Nearly half of airline tickets are now bought online, according to Google.

On a website that Google’s created with more details about the acquisition, the company says: “Searches for travel-related information are among the highest-volume queries we receive at Google,” highlighting the obvious opportunity that exists in the space. Google does note, however, that whatever they launch will “refer people quickly to a site where they can actually purchase flights … we have no plans to sell flights ourselves.”

Marissa Mayer, Google’s user experience head, said she envisions using ITA’s software to field more advanced searches, like “Where can I travel for $700?”

Google said the acquisition will benefit passengers, airlines and online travel agencies by making it easier for users to comparison shop for flights and airfares and by driving more potential customers to airlines’ and online travel agencies’ websites. Google added that it won’t be setting airfare prices and has no plans to sell airline tickets to consumers.

Still, the acquisition could come under regulatory scrutiny because it would pair the largest search site on the Web with the dominant travel-search software company. Antitrust issues have been part of the negotiations, according to people familiar with the matter.

The concerns center around how Google might combine its dominance in the general searchbusiness with ITA’s strengths in the travel sector. ITA, for instance, provides data from its airline searches to others, including Kayak, Birge said.

“What if they decided to stop providing that data? What if they only provided that data to the parent company? What if they provided better data for those airlines to their parent company?”.

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