Microsoft's Bing has signed an agreement with the popular travel search site Kayak in which the travel site will provide Bing users with flight search and pricing data. It follows a small update Bing made last week to its travel offering, ReadWriteWeb noted: users who type the phrase "fly to…" followed by a city name into the Bing search box can pull up the lowest priced ticket to that destination. The feature is powered by airfare prediction technology from Farecast.

ITA and Google

How this offering will be affected by the major pending development in travel search - Google’s prospective $700 million acquisition of ITA Software - is unclear. ITA Software provides airline travel software used by most major airlines and travel sites such as Hotwire, Kayak, Orbitz - and Microsoft's Bing. These companies have protested the acquisition, egging on the Justice Department to stop it on anti trust grounds.

If Google acquires it, these companies say, Google would be able to manipulate and dominate the online air travel market. They argue that not only does ITA provides the technology behind 65% of all carrier-direct online flight searches in the U.S., Google is already source of more than 30% of all search engine traffic to online travel sites.

Still Competitive

Even without the ITA Software issue, online travel search is more competitive and the players more fierce in defending their turf. Expedia reportedly made it harder for people to find American Airline flights on its site, allegedly in response to a policy dispute with the airline. The airline decided to try something new with its ticket distribution by cutting out the middleman to get direct access to the customer in order to make additional pitches for other services such as car rentals and hotels. This, of course, is a direct threat to Orbitz’s and Expedia’s online business model.