The deal brings together two hot headline magnets: Hipmunk, which has a unique UI, a flight search agony filter and high-profile Silicon Valley and Hollywood [Ashton Kutcher] investors, and ITA Software, which is Google’s love interest and much in the news.
For the 20-something Hipmunk cofounders, Adam Goldstein, 22, and Steve Huffman, 27, the partnership is a big deal beyond the nuts and bolts of availability and APIs.
“It sends a market signal when you partner with a company like ITA that we’re here to stay and not just a blip on the radar screen,” Goldstein says.
OK, now for the nuts and bolts.
Goldstein says Hipmunk was attracting its share of well-deserved criticism over the quality of its flight search results so the ITA partnership should resolve that issue and also give the company the flexibility to build better queries.
Currently, Hipmunk uses ITA indirectly because Orbitz, an ITA customer, powers Hipmunk’s shopping and pricing, and the startup also uses the online travel agency for flight booking.
Goldstein says the company tried out the products of most of ITA’s competitors but settled on ITA, although “it’s going to cost us some money.”
“We found ITA to have an extremely high quality of availability results and powerful APIs,” Goldstein says. “As programmers, we felt they were designed for us in mind.”
The partnership, which will be implemented in stages, enables Hipmunk to compete on a level playing field with competitors and eliminates concerns about the quality of its results,” Goldstein says.
Goldstein notes that ITA will power the current Hipmunk product, which sorts flights by user preferences and its agony index, and will give the startup the speed and flexibility to add new features such as flexible day search and tweaks to users’ airline preferences, Huffman says.
While Hipmunk currently uses Orbitz only as a booking option, partnering with ITA accelerates plans to expand into a full-fledged metasearch site, with the gamut of airline and online travel agencies in play as booking alternatives, Goldstein says.
Hipmunk launched its site a few months ago, and already the youthful co-founders have learned lessons about the travel business.
“All the pain is in flights,” Huffman quips. “All the money is everywhere else.”
Thus, Goldstein says, Hipmunk is actively exploring expanding beyond flights and into hotels, cars and other travel products.
So, why partner with ITA when the company finds itself in a firestorm as the Dept. of Justice reviews competition concerns over Google’s intent to buy ITA?
Goldstein says Hipmunk feels comforted by Google’s public statements that ITA will honor its contracts in the future.
Citing nondisclosure agreements, Goldstein declined to discuss any other assurances that Hipmunk may have received from ITA regarding life under Google, if the deal goes through, or existence as a standalone company if the deal collapses.
Since July, when Google revealed its ITA buyout plans, ITA has not signed any major new contracts for QPX. Â Deals with Student Universe and now Hipmunk are the only new agreements that have been publicly disclosed.
Signing agreements with a startups are part of ITA’s history, though. The Cambridge, Mass., company signed agreements with Orbitz and Farecast when they were newborns.
The under-30 set at Hipmunk, with ITA as a partner, probably wouldn’t mind similar outcomes.