Google-ITA Software deal: Engineering talent, intellectual property, price

Google pulled the trigger on about 20 acquisitions in the past year and, before it buys a company, the search-engine leader does its homework about each company’s engineering talent, intellectual property and price.

Asked during its second quarter earnings call about Google’s acquisition philosophy and how it relates to the pending $700 million cash purchase of ITA Software, Google CFO Patrick Pichette mentioned that ITA has interesting “structural data.”

Without commenting any further on ITA directly, Pichette said Google generally considers engineering talent, intellectual property and price when deciding whether to acquire a company.

He cited AdMob, which Google bought for $750 million in May, as a “perfect example” of Google getting “great technology [and a] fantastic team at the right price.”

So, we know that Google had its eyes on ITA’s QPX flight shopping and pricing technology and the engineering team that created it.

That kind of evaluation of engineering talent, intellectual property and purchase price, or a “triangulation” of these elements, as Pichette puts it, certainly led in part to the prolonged nagture of the talks between Google and ITA.

Both parties also were keen to vet antitrust considerations, which also lengthened the discussions.

Pichette says Google then evaluates the trade-offs on price and sometimes walks away from a deal because of the purchase price.

In the end, in the ITA exercise, neither party walked away.

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