April 21 (Bloomberg) -- Google Inc. is in talks to acquire ITA Software Inc., a maker of travel programs used by companies including Orbitz Worldwide Inc. and Microsoft Corp., three people familiar with the matter said.
ITA Software, based in Cambridge, Massachusetts, may seek about $1 billion, said two of the people, who asked not to be identified because the discussions haven’t been made public. The negotiations may not lead to a transaction, the people said.
Google could use ITA Software’s tools, which help users find online flight information, to compete with travel-search features offered by Microsoft. The companies are tussling for share in the U.S. market for online travel, which generated $88.4 billion in sales last year, according to Sherman, Connecticut, travel consulting firm PhoCusWright Inc.
“Google’s mission is to organize the world’s information, and ITA does that for travel,” said Henry Harteveldt, an analyst at Forrester Research Inc. in San Francisco.
ITA Chief Executive Officer Jeremy Wertheimer and spokeswoman Cara Kretz didn’t return phone calls seeking comment. ITA investors include General Catalyst Partners and Sequoia Capital. General Catalyst Managing Director Joel Cutler and Sequoia spokesman Mark Dempster didn’t immediately respond to requests for comment.
Google, based in Mountain View, California, dropped 74 cents to $554.30 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have fallen 11 percent this year.
To enter new markets while retaining its lead in search-related advertising, Google has stepped up the pace of acquisitions. It has announced at least six takeovers this year.
Google has more than five times the search share of Microsoft’s Bing in the U.S, according to ComScore Inc. in Reston, Virginia. Still, Microsoft has gained users partly because of travel-related features, such as predictions of changes in ticket prices.
Google reported first-quarter earnings last week that trailed some analysts’ estimates. Net income rose 37 percent to $1.96 billion, or $6.06 a share, from $1.42 billion, or $4.49, a year earlier.
ITA has raised $111.4 million in venture capital, according to the National Venture Capital Association. ITA’s technology searches airline-reservation systems for sites such as Kayak.com, Orbitz.com and Bing. The company also supports sites for airlines, including Alaska Airlines Inc. and Continental Airlines Inc., administering functions such as ticket changes and managing free tickets for frequent fliers.