Google to buy flight information software firm ITA Software for $700 million

Google is doling out $700 million in cash to buy flight information software company ITA Software, Inc., as the internet giant plans to get a foothold into the fast growing online travel industry.

Founded in 1996 by a team of MIT computer scientists, Cambridge, Massachusetts-based ITA creates innovative solutions for the travel industry.

ITA's QPX software tool for organising flight information is used by leading airlines and travel distributors worldwide including Alaska Airlines, American Airlines, Bing, Continental Airlines, Hotwire, Kayak, Orbitz, Southwest Airlines, TripAdvisor, United Airlines, US Airways, Virgin Atlantic Airways and others.

ITA, which has about 500 employees, also offers a completely new airline passenger reservation system, flight information like fares and flight times.

By buying ITA, Google will compete with flight-comparison services like Kayak, FareCompare, Hotwire and Microsoft's Bing Travel.

Google  may opt to command a small cut from every consumer who clicks through to book travel on the host sites.

The deal will allow Google to pursue the creation of new flight search tools that will enable users to find better flight information more easily on the Internet.