News in Short: Kindle gets 2nd price cut in 2 weeks, Google enters online travel market

News in Short

“The iPad is raising hell with everybody.”

Amazon cut the price of its more expensive Kindle model, just a week after it cut the price of its cheaper model—all in an effort pull itself out of competition with the pricier iPad.

That isn’t to say Amazon doesn’t want to compete Apple’s tablet, it does—but to do so, the lesser-equipped e-reader devices must be comparatively much, much cheaper.

Needham & Co analyst Charles Wolf was quoted in The Globe and Mail as saying that prices could reach zero, and that manufacturers should price the devices low in order to drive sales of e-books. Then, e-books should make up for any losses on the e-readers themselves.

“Amazon’s model should be selling books, and to hell with the device itself,” Charles said. “The iPad is raising hell with everybody.”

The price cut was substantial: down to $379 from $489, with a few minor upgrades to boot.

Google makes all-cash, $700M acquisition

Google plans to buy a travel technology company called ITA Software for $700 Million U.S. The acquisition would enable the Internet search leader to direct airline reservations booked online.

“There is clearly more room for competition and innovation [in online travel]” Google CEO Eric Schmidt was quoted as saying in The Globe and Mail. “We will improve the way flight information is organized.”

ITA Software is a 500-employee company, founded in 1996 by computer scientists in Massachusetts. It sells technology that helps run the reservation systems of many major airlines. It also powers tools that other travel websites use to track airfares.

Federal regulators are likely to spend up to a year determining whether this acquisition will give Google an “unfair advantage” in the online travel market, said Ted Henneberry, a lawyer in Washington. “This is going to raise a lot of eyebrows,” he said.

Eric declined to predict when the deal might close, but said, “We are pretty confident that this is pro-competitive and pro-consumer,” Schmidt said. He also declined to say how much Google will have to pay if the proposed purchase is blocked by regulators.

This isn’t the first Google acquisition to be slowed by lengthy regulation filters. Regulators took almost a year to approve Google’s $3.2 Billion purchase of DoubleClick in 2008 and half a year to approve its more recent $750 Million acquisitionof AdMob.