Why Google Paid $700 Million For ITA: 10% Of Its Search Business Is Travel

southwest airlines plane

Photo: AP

No one knows for sure exactly what Google plans to do with its $700 million acquisition of flight search company ITA.But whether a shiny new travel tool or a forray into online ticket sales is in the works, ITA should provide a big boost for Google, because the company is already in the travel business in a huge way.

Analysts at JP Morgan estimate that around 10% of Google’s search revenue comes from the travel revenue. That surprised us initially, but it makes sense: clicks that lead to the sales of airline tickets or extended hotel stays are incredibly valuable, and those are both things that many consumers are comfortable purchasing online.

The analysts figure that ITA’s technology could help refine Google’s travel results, allowing it to capture a bigger share of that market, even if the company doesn’t launch any radically new products.

That’s not to say that Google won’t. But this could turn into one of Google’s better buys either way.

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