Google licenses Room 77 software in mobile travel-booking push

Google Inc. wants you to reserve a hotel room from your smartphone, and it's spending money on the technology to make it happen.

The biggest Internet-search company is licensing hotel-booking software from Room 77 Inc., a startup backed by Expedia Inc., according to a letter sent to Room 77 shareholders that was obtained by Bloomberg News. Room 77 co-founder and Chief Technology Officer Calvin Yang and many of its engineers are joining Google, the letter said.

Google has bolstered investments in travel to capture a bigger portion of the dollars spent by tourists who book hotels and plane tickets online. In 2011, Google spent about $700 million to buy ITA Software Inc., a provider of flight information, and the company has a service called Hotel Finder that scans prices and availability from numerous online travel agents.

Room 77 is located less than three miles from Google in Mountain View, California. The startup, founded by technology investor Brad Gerstner, is maintaining its "brand, websites, mobile applications, patents" and other technology in the deal, the letter said.

Dawn Lyon, a spokeswoman for Room 77, confirmed the deal, as did Tim Drinan, a spokesman at Google.

Room 77 said that it expects to distribute "tens of millions of excess cash" to investors. The company is focused on building CheckMate, which it purchased last year to help hotels manage mobile booking. Room 77 Chief Executive Officer Drew Patterson, who joined with the CheckMate acquisition, is staying in his current role.

With Room 77, Google can cater to travelers looking to quickly book hotels, the most lucrative part of online travel, while on the move. The deal also steps up competition with Priceline Group Inc., which is one of Google's biggest customers in buying search ads.