Google's (Nasdaq: GOOG) slow-but-steady march into the travel and local listings business continued this week with its latest acquisition: Frommer's, the popular travel guidebook series.
Frommer's will soon become a part of Google.
Frommer's owner, John Wiley & Sons (NYSE: JW/A), announced the purchase Monday, saying it had "entered a definitive agreement to sell all travel assets, including all of its interests in the Frommer's brand, to Google."
The 55-year-old company offers more than 350 guidebooks, an app and a website that books travel and offers trip ideas. It grew out of Arthur Frommer's 1957 bestseller, which advised Americans on how to visit Europe on $5 a day. Wiley, based in Hoboken, N.J., acquired the brand in 2001.
Google declined to comment on whether it will maintain the Frommer's brand or continue to publish the print books. Travel, however, is one of the few areas in which print books remain essential as holidaymakers don't always have access to mobile data when abroad.
The proposed purchase, which the New York Times reported cost approximately $23 million, would be Google's second major foray into the travel business in a year. Last September, it acquired well-known restaurant guide Zagat for $151 million. With the addition of Frommer's, it now has two marquee names in travel and moves closer to providing critiques of every hotel, restaurant and major destination on the planet.
In fact, that's its new mantra: "To provide a review for every relevant place in the world."
Frommer's and Zagat, which Google said it will meld together, will help the company battle online review sites like Yelp (Nasdaq: YELP) and TripAdvisor (Nasdaq: TRIP) in offering recommendations for where to eat, sleep and play. Google, with its new additions, will have an advantage over its competitors in that it can combine the trusted expert advice of its acquired brands with the Yelp and TripAdvisor model of aggregated user comments.
The new acquisition is largely seen as a bid to attract more advertising dollars tied to online travel booking -- and Google, of Mountain View, Calif., has good reason to want its slice of that pie. The U.S. leisure-travel industry spent $2.56 billion on online ads last year, according to research firm eMarketer. That's up 40.6 percent over the previous year. Moreover, U.S. travelers spent more than $100 billion booking trips online last year, and eMarketer expects that figure to grow about 10 percent each year.
Owning Frommer's content and displaying it in search results gives Google the chance to sell travel-related ads against it while also providing more tools for people to actually book their vacations.
Google leaped into the travel business in earnest in 2010 when it purchased flight-data company ITA Software, the creator of popular online flight-booking tools, for $700 million. It then launched its flight search tab last September, one month after introducing a new hotel finder.
But with Zagat and now Frommer's, some think the Internet giant has gone too far. The company is walking a tricky line, critics say, between being a neutral organizer of information and an active producer of content. When you search for something to do in Orlando, Fla., for instance, Frommer's results could come up ahead of TripAdvisor links.
"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 has drawn criticism from its competitors in the last few months for allotting more space on its search results to business listings from Zagat. Consumer Watchdog called on federal antitrust regulators to block the purchase of Frommer's, claiming the same is likely to happen with its listings.
"It makes absolutely no sense to approve this deal," said Simpson. "And, if it is allowed with conditions, there is absolutely no reason to believe the Internet giant will live up to its word."
Stephen Kaufer, the CEO of TripAdvisor, has spoken out about Google's preference for its own sites. He told the 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."
TripAdvisor's shares fell 16 cents to $33.36 in Tuesday trading as those of Yelp fell $1.37, to $22.50, continuing their losses since Google's announcement. By contrast, Google shares set an all-time record Tuesday and traded recently at $668.59, up $8.58.
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