The Associated Press

SAN FRANCISCO — Google Inc. (Nasdaq: GOOG) plans to buy travel technology company in a $700 million deal that would enable the Internet search leader to steer more of the airline reservations booked on the Web.

The all-cash acquisition announced Thursday signals Google’s intention to challenge flight-comparison services that are ITA customers, including Kayak, FareCompare, Hotwire and Microsoft Corp.’s Bing Travel. The deal is likely to face a rigorous review by federal antitrust regulators.

"There is clearly more room for competition and innovation" in online travel, Google CEO Eric Schmidt said in a conference call. "We will improve the way flight information is organized."

ITA Software, a 500-employee company created in 1996 by computer scientists at the Massachusetts Institute of Technology, sells technology that helps run the reservation systems of many airlines, including American, Southwest, Alaska and Continental. Its software also powers the tools that other travel websites use to track air fares.

The widespread reliance on ITA’s technology means federal regulators are likely to spend six months to a year trying to determine whether the acquisition will give Google an unfair advantage in the rapidly growing online travel market, said Ted Henneberry, an antitrust lawyer in Washington for Orrick, Herrington & Sutcliffe.

"This is going to raise a lot of eyebrows," he said.

Schmidt declined to predict when the deal might close, but said he expected Google would ultimately win approval after regulators take a "fair amount" of time to review the deal.

"We are pretty confident that this is pro-competitive and pro-consumer," Schmidt said.

He declined to say how much Google will have to pay if the proposed purchase is blocked by regulators.

Both the Federal Trade Commission and U.S. Justice Department declined to comment Thursday.

Online travel industry analyst Henry Harteveldt predicted the acquisition will be cleared because ITA Software isn’t a direct competitor to Google.

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