August 14, 2012
Search Giant Google Acquiring Frommer’s To Step Up Travel Business
Lawrence LeBlond for redOrbit.com - Your Universe Online
Internet search king Google Inc. announced Monday that it is close to closing a deal with travel guidebooks line Frommer´s. The acquisition is seen as an effort for Google to amass a stockpile of publishing content to strengthen its role in the online travel broker business.
The acquisition comes nearly a year after the $151-million purchase of Zagat Survey, which offers reviews of restaurants, hotels and other hotspots around the world. The value of Google´s latest deal with John Wiley & Sons has not been made public.
Frommer´s, which has been a mainstay in the travel industry for more than 50 years, was launched in 1957 when Arthur Frommer published his first guidebook: ℠Europe on $5 a day.´
Google´s ability to provide trusted content and deliver relevant ads is critical as it competes with other mobile travel brands such as Yelp, Foursquare and TripAdvisor. Frommer´s, including its guidebook content, website and mobile apps, will join Google´s expending portfolio of travel assets.
Frommer´s own portfolio of more than 300 guidebooks will complement Google´s aim to provide “a review for every relevant place in the world,” a Google spokeswoman said in a statement.
Frommer´s print editions will remain safe for now, but could be merged into an online-only brand along with Zagat sometime down the road.
Online travel sales in the US are expected to pass $119 billion in 2012, up from $107 billion in 2011, according to eMarketer.
“It's been Google's overarching strategy to dominate the travel vertical,” B. Riley & Co analyst Sameet Sinha told Reuters. “They want to dislodge these vertical search engines that may have gained over the last few years.”
Beside last year´s Zagat Survey acquisition, Google also bought out ITA Software for $700 million. ITA Software provides search technology for companies such as travel agent Kayak.com owner Kayak Software Corp.
Since Google´s acquisition of Zagat, the search giant has allotted more and more space on its search results to business listings from Zagat, which has drawn scrutiny and criticism from competitors such as Yelp. By adding Frommer´s into the mix, Google should further expand its reach across the globe.
“They want to marry content with commerce, and content is an important part of that equation,” said Sinha.
Google has made it clear it is willing to offer top dollar to expand its portfolio in the travel market. It attempted to purchase Yelp in 2009 for more than $500 million and then a year later tried to acquire Groupon for $600 million. Both attempts were unsuccessful.
Google´s attempt to acquire Frommer´s may also prove unsuccessful if Consumer Watchdog has anything to say about it; and in fact they do: The advocacy group on Monday called on federal antitrust regulators to block Google´s purchase of the travel brand.
“There is a fundamental conflict between being a search provider and a content provider,” said John M. Simpson, Consumer Watchdog´s Privacy Project Director. “As Google has increased its content and services, it has unfairly favored them in its search results and damaged competitors.”
Google is under investigation for antitrust violations by the Federal Trade Commission, European Antitrust authorities, India, Brazil and Texas. “With this deal Google executives are thumbing their noses at these regulators,” said Simpson.
Google has also been under scrutiny by antitrust authorities for its efforts to direct search-engine users to its Google+ business listings, undermining travel and online-review sites such as TripAdvisor. However, the Frommer´s deal is too small to trigger an automatic review by antitrust authorities.
Google has denied any anti-competitive practices and has repeatedly said it creates services to benefit users, rather than other websites. Some courts have agreed with Google´s assertion that its search engine results are protected under free-speech rights.
“It is puzzling to us that Google is going backwards to the opinion of one–a writer–when TripAdvisor is proof that travelers like the wisdom of crowds” and their social-network friends, Stephen Kaufer, the CEO of TripAdvisor told Wall Street Journal.
“I absolutely worry that Google will preference Frommer's content above organic search results to the detriment of the users' experience and the enrichment of Google,” he added.
Bill Newlin, publisher of Avalon Travel, an imprint of the Perseus Books Group that publishes travel expert Rick Steves and the Moon branded guides, said he wasn't worried about Frommer's titles getting an unfair advantage in Web search.
“There's only one way to spell Rick Steves,” he said.