Does Google want to plan your vacations?
The search giant's purchase of Frommer's travel guides has people guessing about its intensions. Google Travel, anyone?
Google (GOOG) raised some eyebrows and plenty of questions this week when it announced plans to buy the venerable travel guide Frommer's from publishing house John Wiley & Sons for a reported $23 million.
Google says it nabbed Frommer's to fulfill its "goal to provide a review for every relevant place in the world" in its search results, in line with what it's doing with Zagat Survey, the restaurant and business rating enterprise Google bought last year.
But analysts are looking at some of the search giant's other recent purchases -- notably the 2010 acquisition of flight information company ITA Software -- and see a more ambitious goal of creating a one-stop travel empire. Is Google making a big play for a slice of the lucrative tourism and travel business? Should it?
Here's a look at what the Frommer's purchase means.
Why did Google buy Frommer's?
The simplest explanation is the one Google is pushing: As it has with Zagat, Google will incorporate Frommer's extensive and authoritative reviews into its search results, then sell travel-related ads off the information. That would be reason enough. According to research firm eMarketer Inc., the U.S. leisure-travel industry dropped $2.56 billion on online ads last year.
But U.S. travelers also spent more than $100 billion to book trips online, and Google has barely tapped that market. Google could combine its assets to create "a one stop trip advisor section that would compete with the likes of Yelp and TripAdvisor," says Christopher Versace at Forbes, and then help travelers book their flights, hotel rooms, and rental cars. TripAdvisor (TRIP) shares fell 4.6% on the Frommer's sale news, and Yelp's (YELP) shares dropped 7.7%.
How might Google Travel work?
Google Travel "would be an awesome idea," says Matt Miller at Forbes. Imagine, "all you'd have to do is type in your destination and the site could plan everything for you." Book your flight; use Frommer's and Zagat to find the best hotels, restaurants, bars, and other tourist destinations, maybe tailoring the results to your tastes as revealed through Google Plus; then putting everything on Google Maps with driving directions, perhaps even translating foreign signs for you. Is that creepy "in a Nineteen Eighty-Four-type of way"? Perhaps, but I can't help it: "Google just makes things simple."
Will Google kill off Frommer's travel guides?
It hasn't said. The books have been around since 1957, when Arthur Frommer published Europe on Five Dollars a Day, says Claire Cain Miller at The New York Times, and "while Frommer's has mobile apps, travel is one of the few areas in which print books are still essential because people often do not have cellphone data access when traveling abroad." And if we're reading company tea leaves, Google "still uses the Zagat band and publishes Zagat books."
I don't see the point, says Forbes' Matt Miller. Frankly, "I had no idea that print guides were even still published," and the only problem with relying on Yelp for all my travel tips is the frustration "switching between Yelp and Google Maps on my phone."
What happened to Google the search company?
As late as 2010, Google's Eric Schmidt said his company was being "careful to define a line where we don't cross into content," notes Miller at The New York Times, but really, "Google started chipping away at that line as early as 2008," with its defunct Wikipedia rival Google Knol.
With the Frommer's purchase, it's clear that Google is really a media company, says Jeff Bercovici at Forbes. "The travel-guide publisher is indisputably a content business, not a platform or a network or anything else more quintessentially Google-y."
That's why Google will probably face an antitrust challenge, say Amir Efrati and Jeffrey Trachtenberg at The Wall Street Journal. As the dominant search company starts relying on the advice of its own paid experts, will it still let "crowd-sourced opinions bubble to the top when users search for answers online"? Will it still be a neutral arbiter of the web? That's what rivals like Yelp and TripAdvisor want to know, and I bet the Federal Trade Commission will, too.
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