REPORT FROM THE U.S.-There's a potential new powerhouse poised to jump into the travel sector.

Search engine behemoth Google announced 1 July it plans to acquire ITA Software in an all-cash deal for US$700 million, subject to adjustments. A Google spokesman said there was no timetable yet for the closing of the deal.

ITA, based in Cambridge, Massachusetts, is a provider of software that is used to organize flight information. The potential partnering with search powerhouse Google could create a powerful force in the travel sector, analysts say.

Google might have believed its travel offerings were inferior to those of other sites, notably Microsoft Bing's airfare predictor service, and saw ITA as a way to get even, said Henry Harteveldt, travel industry analyst for Forrester Research. ITA's Needlebase software, which allows users to acquire and sort through data from multiple sources, is likely to level the playing field, Harteveldt said.

Bing, which uses ITA, will now likely look for a new supplier, he said.

"This most likely caused a headache for Bing," he said.

Adding hotel searches

ITA currently does not offer any search capabilities for hotels, but that could change.

Google is likely to add a hotel search function, said Bill Watson, managing partner of Boston-based hospitality technology consulting firm The Prism Partnership. That search capability could then be added to airline and car rental searches, providing for one-stop travel information gathering for consumers, he added.

"This could be a very pivotal moment in time for the travel industry," Watson said.

Robert Cole founder RockCheetah

All this could be leading up to the emergence of "Troogle," or travel Google, said Robert Cole, founder of hotel marketing strategy and technology consultant RockCheetah.

"Travel's a big part of people's lives. What they do on the hotel side will be interesting," Cole said. "There's big opposition there."

It is still too early in the acquisition process to say exactly what new products or services the company intends to roll out, Google spokesman Andrew Pederson said.

Antitrust implications

Google's opposition is already taking notice of the possible deal.

Barry Diller, chairman of Expedia and InterActive Corporation, called the Google-ITA marriage "disturbing," according to a report in the Financial Times. He said such a deal would give Google an unfair advantage in the market.

Google said it is not in violation of antitrust law because it is not setting prices, selling airline tickets, shutting out the competition or altering the market-share environment.

Analysts were divided over whether the ITA deal could be nixed over antitrust issues. Watson said the sheer amount of data Google would be control could send up warning flags.

Not everyone shared that opinion, however.

Cole expects the deal to make it through the government's antitrust test. The consumer isn't being harmed if the deal is finalized, he said.

"I don't think they're trying to be evil," he said. "It might make more people travel more."

Large companies are more likely to come under the spotlight simply because of their size, Harteveldt said.

"I jokingly say Google would face scrutiny if they changed the soda machines in the cafeteria," Harteveldt said.

A new OTA?

Assuming the deal is finally approved, Cole said there is "no chance at all" of Google becoming the newest online travel agent.

"They're making all of their money off of advertising," he said, adding, "I think they want to do exactly what they're doing in all of their other verticals and markets."

While Google has indicated it has no desire to begin directly selling airline tickets, Watson is taking more of a wait-and-see approach.

"It's my belief they might take that next step and get into the booking of travel," he said. "ITA has the keys to the kingdom."