Google Inc has agreed to buy travel industry search-provider ITA Software for $700 million in cash, twinning its dominance in Internet search with ITA's widely used technology.

The deal marks the Internet advertising and search leader's foray into the business of online travel information, and allows Google to shore up its search service and target users more specifically.

But it has unnerved industry players worried that Google could end up wielding too much influence in the sector.

ITA is a major source of information about airfares to the aviation industry, used by a airlines, travel agents and other sites including AMR Corp's American Airlines, Continental Airlines, Hotwire, Kayak, Orbitz and Microsoft Corp's Bing.

Google beat out reported bidders Expedia, Kayak.com and Travelport,

Their technology opens exciting possibilities for us to create new ways for users to more easily find flight information online, and we're looking forward to welcoming them to Google, CEO Eric Schmidt said in a statement.

Shares in Google, which slid 1.2 percent on Thursday to $439.49 in a weak market, held steady in after-hours trade.

(Reporting by Edwin Chan, editing by Leslie Gevirtz)

Eric E. Schmidt Google