Google ignites speculation with Frommer's acquisition

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googlezagatGoogle’s announcement last week that it would purchase Frommer’s, the iconic publisher of print and electronic travel guides, touched off a wave of speculation over the search giant’s motives and what the move might portend for the travel industry.


A great deal of speculation revolved around the possibility that it would ultimately merge Frommer’s content with that of Zagat, the publisher of restaurant guidebooks that it purchased last year, thus forging a formidable database of expert reviews. Google declined to comment on that and other speculation about its plans.

Whatever its strategy, Google’s purchase of Frommer’s was widely seen by analysts as a move that was certain to enhance its local search capabilities and thus serve as the foundation for a platform against which it can sell travel advertising — but not travel bookings — at local and regional levels.

Those advertisers could include suppliers, wholesalers, packagers and retail travel agencies.

At the very least, the Frommer’s acquisition complements the Zagat restaurant reviews, offering descriptions and commentary on hotels, activities and a range of subjects of interest to consumers who are planning to travel, or even just planning a day’s activities in their hometowns.

Travel is a large and growing category for Google. In addition to Zagat and Frommer’s, it also includes Hotel Finder and Flight Search, both of which were deployed to assist consumers with information searches.

Significantly, however, none of its travel acquisitions so far have been actual booking transaction sites, and analysts predict that none will.

Google has not said how much it is paying the buy Frommer’s and some related travel assets from the John Wiley & Sons publishing house, though an unconfirmed figure of $23 million has appeared widely in the consumer news media. The sale includes the Unofficial Guides and WhatsonWhen brands, as well.

A Google spokeswoman, who asked not to be named, said the company was “not sharing” product plans, such as whether Google will continue to publish print products or where on the Web the Frommer’s content might appear in the future.

“The general rationale for the purchase is that Frommer’s has a lot of high-quality content in diverse regions [of the world] and lots of reviews in various categories, [such as] hotels and things to do,” she said. “And it has a strong editorial team with expertise in providing information that is easy to read and easy to act on.”

She continued: “We wanted that team to accelerate what we are doing with Zagat, to put [the content] on Google search, not in an obtrusive way.”

Currently, standard searches for travel sites deliver listings that might include a Zagat box with a click-through option to see reviews. That link takes users to Google+, a social network site designed to compete with Facebook, or, for those who are not members, to a registration page. Google+ currently counts about 250,000 members.

Google searches will ultimately deliver the Frommer’s content in the same way, but it was not clear where else the content will appear in the future or even if the brand name will survive.

Currently, Frommer’s sells its content to a number of websites through licensing agreements. The Google spokeswoman said the search giant would review where Frommer’s is placed now before determining future placement.

As for the name, she said, “For now, we’ll bring Frommer’s content to Google under its own brand name. We’ll integrate it more with Zagat over time, as part of our ongoing effort to provide a beautiful, consistent experience across Google.”

Henry Harteveldt, chief research officer and co-founder of the Atmosphere Research Group in San Francisco, said he believed the Frommer’s name was too valuable to discard, and he expected Google to continue licensing the content to others.

Certain content or functionality might be limited to Google+, he said, but Google is “pragmatic” and will want to reap additional benefits from its investment.

On the other hand, he said, Google can enhance the value of Frommer’s at Google+ and via smartphones and tablets that run Google’s Android operating system, creating new ways for consumers to access Frommer’s content. He said he “suspects this will help Frommer’s to have a strong presence in mobile” and will make the content more useful to travelers while they are on the road.

Lorraine Sileo, vice president of research at PhoCusWright, said the transfer of Frommer’s from Wiley to a Web business is part of the “natural progression of media being digitized.”

However, she said, she doesn’t see Google shutting down print in the immediate future. When PhoCusWright surveys Internet users, she said, three-quarters say they search for travel information on the Web, but about a quarter also say they use printed sources, including guidebooks.

In addition, she and Harteveldt agreed that Google is very unlikely to parlay its travel interests into a booking-transaction business. Google created a stir two years ago when it purchased ITA Software. But while ITA powers Google’s Flight Search, it sends users to other sites for actual bookings, including online travel agencies (OTAs) such as Orbitz or the airline’s own sites.

Sileo said ITA was “not a game changer yet, but I don’t believe Google wants to be an OTA. … Google is not about closing transactions; it is about marketing.”

As the company beefs up its travel platform, she said, “travel companies will have to allocate more of their marketing budgets to Google because of the opportunities to reach more people.”

Besides, Harteveldt added, Google “is focused on thick margins,” which it would not get by selling travel, and Google is “smart enough not to go into business competing with its best advertisers.”
Harteveldt sees Google working to improve the utility of its travel-related offerings with a view to “monetizing those assets.” In that regard, he said, advertising and licensing deals pay better than commissions on bookings.

He said he sees the integration of hotel and air search capabilities with Frommer’s, Zagat and other content as a way to assist users with trip planning.

Further, he said, nothing about this cuts out travel agents, who could benefit both by employing Google’s enhanced travel search tools in their own work and by using those search pages to advertise their expertise and specializations.
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