Google Flying High in Travel With Frommer's
Google plans to acquire travel publisher Frommer’s from its parent company Wiley, adding to its growing portfolio of travel and entertainment media properties.
Frommer’s publishes printed and online travel guides to destinations worldwide, with information on tourist attractions, hotels, dining, and travel tips. Frommer’s will be run out of Google property Zagat’s, according to the company.
The purchase price was not disclosed, but a report in The New York Times put it at about $23 million. The price tag is too low to trigger automatic antitrust review, and the acquisition doesn’t give Google anything like a dominant position in the vibrant and diverse travel publishing market.
"I don’t really see a deal this size triggering regulatory alarm bells," said Daniel O'Connor, senior director for public policy and government affairs at the Computer & Communications Industry Association.
Still, online competitors are eyeing the deal warily. Some are worried that Google is leveraging its dominance in Internet search to push people to its own properties. The efforts of a group of companies including Yelp, TripAdvisor, Expedia, and Microsoft have helped train the eyes of regulators around the world on Google, with antitrust investigations pending in the United States, the European Union, South Korea, Australia, and elsewhere.
The EU probe is said to be wrapping up, with Google and the EU negotiating remedies to answer complaints spelled out by Europe’s top antitrust regulator, Joaquin Almunia.
While those negotiations are taking place in secret, the acquisition of Frommer’s suggests that some of the more serious penalties that have been sought by Google’s critics are off the table. These include spinning off some of Google’s specialized offerings in travel, search, and shopping, or precluding Google from expanding its products in those sectors.
Google earns the vast majority of its revenues from advertising. According to the research firm eMarketer, U.S. online ad spending in the leisure travel industry will total $3.16 billion this year and is projected to rise to $5.58 billion by 2016. The integration of Frommer’s into Google adds to its desirability as an advertising vehicle.
More than that, it creates an integrated, searchable, end-to-end system for researching travel plans and booking trips and lodging, as well as finding dining and entertainment options and shopping that can move beyond the desktop and into table computers and mobile apps.
Google’s travel, entertainment, and shopping assets include Google Maps, the travel-booking software company ITA that was acquired in 2010 for $676 million (and that conducts flight searches for Google), and Zagat, acquired in 2011 for $151 million. Google has also purchased companies in mobile payments, digital coupons, and online daily deals.
“Increasingly, it is not accurate to speak about search engines and websites as distinct spaces or the relationship between search and content as vertical,” wrote University of Michigan law professor Daniel A. Crane in a 2011 law review article on search neutrality that has been cited favorably by Google. “The lines are blurring at ether speed.”
It’s this speed that is going to make it hard for regulators to keep pace with Google, even if they take the view that the search-engine giant has a history of leveraging its dominance in search in a way that punishes smaller rivals.
