|By Jessica Guynn, Los Angeles
TimesMcClatchy-Tribune Regional News
Aug. 14, 2012--SAN FRANCISCO -- Google Inc. has set its sights on the travel industry.
Looking to attract more advertising dollars, Google said Monday that it would buy Frommer's travel guides from publishing house John Wiley & Sons Inc. for an undisclosed amount.
The proposed purchase would be Google's second major entry into the travel information business. Last September it bought Zagat, a well-known restaurant guide. With the acquisition of Frommer's, another marquee name in travel, Google moves closer to its goal of providing critiques of every hotel, restaurant and hot spot on Earth.
Trustworthy reviews from Frommer's could give Web surfers more reason to visit Google, which wants to generate more advertising revenue from the growing online travel industry.
The Internet giant is vying with Facebook Inc. and online reviews sites such as Yelp Inc. and TripAdvisor Inc. to become the go-to place to find the best recommendations for where to visit, eat and stay.
According to research firm EMarketer Inc., the U.S. leisure-travel industry spent $2.56 billion on online ads last year, up 40.6% from a year earlier. Last year U.S.-based travelers spent more than $100 billion to book trips online. That figure is expected to grow about 10% a year, EMarketer said.
Google made its first big splash in travel in 2010 with the purchase of flight-data company ITA Software, which powers flight-booking tools on websites. Last year, Google launched its own search service for U.S. flights. After its surprise $151-million purchase of Zagat spearheaded by Marissa Mayer, who is now chief executive of Yahoo Inc., Google now has an editorial team in New York and London that oversees writers and photographers around the globe.
Analysts say Google is looking to beef up its search results, create more travel tools and, most important, sell more travel ads.
"Google is taking a more aggressive stance in the travel space," Susquehanna International Group analyst Herman Leung said.
Google could generate about $2 billion to $3 billion a year from selling travel ads on its search engine and flight-booking service, Leung estimated. Google does not break out those figures.
But first, Leung said, Google needs to lure more users with better content.
It's not for lack of trying. A deal to buy Yelp collapsed in December 2009.
Since then, Google has come under heavy scrutiny from federal regulators, state attorneys general and foreign governments concerned that its dominance on the Web may be harming consumers and shutting out competitors. Rivals complain that Google is the gateway to the Web and has the power to control -- and choke -- traffic to websites. They also say Google prioritizes its products in search results and had lifted content from other companies.
Longtime Google critic Consumer Watchdog, an organization based in Santa Monica, said it would call on federal antitrust authorities to block the purchase.
"There is a fundamental conflict between being a search provider and a content provider," Consumer Watchdog spokesman John Simpson said in an emailed statement.
The plan to purchase Frommer's put pressure on shares of TripAdvisor and Yelp. TripAdvisor fell 4.5%, or $1.58, to $33.52. Yelp fell 7.7%, or $1.98, to $23.87. Google, on the other hand, rose $18.01, or 2.8%, to $660.01.
Frommer's was a cheap ticket for access to quality travel content, Leung said.
A person with knowledge of the Frommer's deal said it was worth less than $66 million, meaning it did not exceed the amount that would trigger an automatic review from antitrust authorities. The person spoke on the condition of anonymity because she is not authorized to speak publicly for the Mountain View, Calif., Internet company. Google would not comment on the terms of the deal.
"The Frommer's team and the quality and scope of their content will be a great addition to the Zagat team," Google said in an e-mailed statement.
Google was not on the hunt for the deal but looked into it after John Wiley & Sons put the guidebooks and website up for sale in March, the person familiar with the deal said.
"Finding the right home for Frommer's ranked high in our criteria, and we think Google is a great fit," said Susan Spilka, Wiley's vice president of corporate communications.
Frommer's offers guidebooks plus a website that books travel and offers trip ideas and other travel information and mobile apps. It was founded in 1957 when Arthur Frommer wrote a book with travel advice to Americans visiting Europe on $5 a day. Wiley bought Frommer's in 2001.
Opus Research analyst Greg Sterling said Frommer's will help Google "compete much more forcefully in the travel circle," he said. But Google will have to improve the experience for users searching for hotels, flights and other travel information, he cautioned.
"People want trusted advice, and I think that's what Frommer's represents to a large number of people," he said.
Times staff writer William D'Urso contributed to this report.
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