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Comment by hristov | Hacker News Reader

This is a good opportunity for someone to start a competitor of ITA. Google are only required to serve the ITA clients for five years. They will probably stop afterwards, they will want people to use their search engine to find flights.

The only thing special about ITA is their excellent software. Apparently they get their raw data from another company that is willing to license the data to anyone. I am sure that there are still some old LISPers around that can write a similar software for a new company.

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Apparently they get their raw data from another company that is willing to license the data to anyone.

This is not true. In order to do what ITA does, you need schedules, fares, and availability data. You can buy the first two from clearinghouses if you have enough money. But the only way to get availability data is to either contract with airlines directly OR contract with your competitors.

I am sure that there are still some old LISPers around that can write a similar software for a new company.

That is just breathtakingly wrong.

Breathtakingly wrong? Are you saying there aren't any old lispers left? Or that old lipers cannot write similar software?

Before you say something is breathtakingly wrong you should read it carefully and try to understand it. This way you might also get some of the jokes that are currently flying over your head.

There are plenty of lispers left. I'm one of them. I also used to work at ITA.

The bit that is breathtakingly wrong is the notion that you can just take some smart lisper, lock them in a room, and have them replicate what ITA did and have that be a viable business. See martincmartin's and my comments later in this thread to learn why that would be incredibly hard. With a smart enough team and enough time and money, you could certainly do it, but this is a project that would take many years and its unlikely anyone would be able to keep funding for that long. ITA had a much easier job: it was competing with very poorly designed systems that ran on mainframes and had very little CPU power available.

Given what you and martincmartin are saying, I am left wondering why Google was able to buy ITA for so little. How can such a thing be worth less than a billion dollars?

Because there's a rather finite amount of money spent on air travel which means that the valuation of any one company in that sector will be well within Google's means?

Perhaps. But in that case it's a much smaller market than I imagined. Also relevant is that ITA raised $100M in 2006, so their $700M exit is hardly a home run by VC standards. It doesn't seem to match the astonishingly strong technical and market position you (convincingly) describe.

http://www.itasoftware.com/news-events/press-release.html?id.... Note that the round included Sequoia who are known for caring only about big markets.

ITA raised all that money to build a reservation system to replace the old mainframe systems that are fabulously expensive to run. That would have been a market of the kind that required outside investement from a company that was already profitable (I think ITA had more people working on the reservation system than the search), and that a big VC would love to bet on.

From what I hear it worked technically, but failed commercially due to the badly timed recession. It seems like a fair bet that Google's offer wasn't putting a lot of value on the reservation system. Even if it could be made to work, it's not the kind of a business that Google is usually in.

The margins in air travel are also slim. Google did a very smart thing here. There business model can support the ITA purchase, not many other businesses could do this. The kicker is they also just hired a lot of talent.

It would be good to read up on ATPCO. Basically, ITA sucks up the ATPCO feed as well as any direct connects with airlines worldwide and then processes that data into usable feeds for clients. In many cases, the trouble/expense of handling the ATPCO data is not worth it to sites so they pay ITA to provide them with a feed that meets their responsiveness/API/uptime/accuracy requirements.

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