Google buys Frommer’s travel brand
By Hayley Tsukayama,
Google’s aggressive push into the travel business continued Monday as the company snapped up the Frommer’s brand of guidebooks.
Analysts say Frommer’s is a natural fit for Google as it seeks to expand its original content offerings — an effort that has raised antitrust concerns in the past.
The travel review group, founded in 1957, produces guides for destinations around the world. Publisher John Wiley & Sons said in a Monday news release that it sold the noted brand because it didn’t fit with its long-term strategy.
Google, which did not disclose the terms of the deal, said it will fold the Frommer’s brand into the same group as the Zagat food guide, which the company bought in September. Google said in a statement that its goal with the Frommer’s acquisition is to “provide a review for every relevant place in the world.”
The tech giant uses Zagat data in its search results, offering a restaurant’s Zagat rating alongside addresses and phone numbers. The company could do something similar with the Frommer’s data, analysts said.
“It’s just another push for Google to become more of a destination site from its roots as a search engine,” said Colin Gillis, a technology analyst for BCG Partners.
Google has been evolving its search services in recent months to be able to provide users with immediate answers to their questions as opposed to directing them to other Web sites. The search giant frequently uses travel planning as an example when demonstrating new features.
In recent months, the company has put an emphasis on providing more information on local businesses, as well as adding search features that will make it easier for travelers to find information about their flights, hotel bookings and off-the-beaten-path attractions.
For example, if you opt to allow Google to pull from your Gmail account, search results for “trails in Portland” would include any e-mails you’ve sent or received about that topic.
Google’s expansion into travel has run afoul of regulators in the past. In 2011, Google acquired the travel software firm ITA, a flight-booking service used by airlines and travel sites such as Orbitz. Some cautioned that the acquisition could allow Google to unfairly leverage its search market share to promote its own content.
The Justice Department approved the deal in April 2011, but with conditions specifying that Google license its software and continue to fund software research in the industry.
Critics of the ITA deal said Monday that the Frommer’s purchase raises similar issues.
“This is further down the road of having content that will keep you on the site longer,” said John Simpson, executive director of Consumer Watchdog, who said regulators should block the deal. “There are serious potential antitrust questions around how the search function is used with a site that now is offering its own unique content.”
But others in the tech industry said the acquisition is unlikely to draw concern from antitrust regulators, who are separately looking into Google’s search practices in the United States and in Europe, because the size of the deal is relatively small and there is arguably plenty of competition in the travel guidebook market.
“This isn’t the one that leaps off the page at you,” said Melissa Maxman, an antitrust lawyer at Cozen O’Connor. “If I had to bet, I would bet that they would bless it.”
Shares of competitors such as TripAdvisor, Expedia, Orbitz and Priceline closed lower Monday after the news. Yelp — the user-generated review site that Google courted with a $550 million bid in 2010 — closed at $23.87, down 7.7 percent, but saw a slight bump in after-hours trading.
Despite the initial hits, Gillis said competitors shouldn’t worry about the new deal.
“Yelp still has a market value of $1.5 billion,” Gillis said. “They’re still the leader when it comes to quality user-generated reviews. I don’t think this will trigger a wave of consolidation.”
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