They're paying $700 million in cash for it, but it still has to pass anti-trust scrutiny which is always a big hurdle for Google nowadays. Recently, many travel web sites and Microsoft were trying to band together to purchase ITA to keep it from Google. These sites are heavily reliant upon ITA's software, algorithms and data, so this will be interesting to see how it plays out. Will it continue to sell its products and services to competitors or keep it in house? If they keep it to themselves, this move could cripple companies like kayak and orbitz, as well as Bing's air travel services.

In addition, will airlines be willing to keep sharing their data with ITA since they compete for ticket sales as well? My guess is that they will but it will likely cost more now Google owns them and their may be more demand for it from others like MS and Expedia.

http://www.boston.com/business/technology/articles/2010/06/30/travel_sites_could_ally_to_keep_ita_independent/

Official announcement...
http://googleblog.blogspot.com/2010/07/taking-off-with-ita.html