Google, ITA, and the Future of Travel: It’s All About Data, Not Search

4/23/12Follow @gthuang

Sitting across the table from me, on the seventh floor of a brick building near Kendall Square, is the head of Google travel. He controls where the big, bad Internet giant (NASDAQ: GOOG) will go in the vast competitive landscape of flight and hotel search, airline reservation systems, relationships with online travel agencies, and so on. So what to ask him, and where to begin?

How about, what is Google’s big vision for travel?

“We’re kind of low-key. You know, let the product launches speak, rather than saying, ‘It’s going to be like this.’ No, no. ‘Here’s this thing we built—try it.’ That’s kind of the favored locution.”

OK, well, how is the integration between Google and ITA Software going? You know, the $700 million acquisition that the U.S. Department of Justice barely allowed to go through a year ago, amid complaints of anti-competition? It can’t be easy.

“For ITA Software by Google, we’re doing what we’re doing, and things are going great. We’re continuing to sign up customers for pricing and shopping. We now finally got our reservation system out there. We’re in the middle of conversations with several airlines about it, which is very exciting. On the consumer side, we managed to get Flight Search up very quickly, within a few months of being allowed to finally work together.”

Let’s come back to that. What was your worst air travel experience ever?

He thinks for a moment, then recounts a story from the 1980s, when he was in school at MIT: “I went home for Thanksgiving break. It was just New York. As a grad student, it was ‘minimize price absolutely.’ At the time, People Express out of Newark had a really inexpensive flight. But one trip back, I got to the airport in Newark. We got delayed for a while, we finally took off. The weather was bad, we circled. We circled enough, we ran out of fuel. We diverted to the nearest airport, which was Newark! So we went back to Newark, landed, picked up more fuel. The whole thing ended up being nine hours door-to-door, New York to Boston. I missed all my classes on Monday.”

I asked that question for two reasons. One is to show that the head of Google travel is in fact a regular guy, albeit with a very irregular skill set. The other reason is that Google—with its broad efforts across search, airfare pricing, maps, mobile, user reviews, and geo-location—could conceivably make the entire experience of travel better for consumers, while also making a lot more money for itself. That’s what this is all about; now it’s just a matter of whether (and how) it will happen.

By now you may have figured out that the guy across the table was Jeremy Wertheimer (see photo, left), the co-founder and longtime CEO of ITA Software, based in Cambridge, MA. His official title at Google is vice president of travel, and he reports to Jeff Huber, Google’s senior vice president of commerce and local. Over the past few weeks, I have spoken in depth with Wertheimer and a number of other executives at Google, ITA, and outside companies. My goal: to parse out what the future of travel tech really looks like to Google and others; how this will affect the travel sector and consumers; and what technology and business issues arise when a modern Web giant collides with an old, entrenched industry.

(Hint: it’s really about getting more out of data, which is what Google does best.)

Google and ITA, One Year Later

First, some back-story. ITA Software started in 1996, the brainchild of a group of MIT artificial intelligence guys, including Wertheimer. The company developed an airfare pricing and shopping system, called QPX, that it licensed to Orbitz and then to many other online travel services and airlines such as American Airlines, United Airlines, Kayak, TripAdvisor, and Microsoft’s Bing Travel (fka Farecast). Since 2005, ITA has been working on an all-encompassing reservation system for airlines, called PSS, which it just rolled out for Cape Air (its first customer) last month. ITA’s acquisition by Google was announced in July 2010, but it took almost a year for the deal to pass through an antitrust review. The upshot: Google has to keep providing ITA’s software to existing customers—some of them now competitors—for five years, along with some other provisions to ensure “fair” competition.

Meanwhile, Google is hardly new to the travel industry. Although the ITA deal was viewed by many as the search giant “getting into travel,” that is not technically correct. Back in 2004-2005, the company rolled out … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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