Google to acquire Frommer's travel guidebooks
Google Inc is buying the Frommer's line of travel guidebooks, the latest move to amass a trove of publishing content that could strengthen the No. 1 Internet search company's push to become a major online travel broker. By Alexei Oreskovic and Gerry Shih.
The sale by John Wiley & Sons Inc comes nearly a year after Google's $151 million purchase of Zagat Survey, which offers reviews of restaurants, hotels and nightclubs in cities around the world.
Google and Wiley & Sons did not announce financial terms for the deal, which is expected to close shortly.
The deal will meld the 55-year-old travel publisher's deep database of hotels and sights into a search giant that is seeking to position its services across the entire trip-planning process, from searching for a holiday destination and looking up hotel reviews to booking tours and restaurants in far-flung cities.
As a result, analysts said, Google is increasingly threatening a range of companies, like review site Yelp Inc and flight and hotel booking service TripAdvisor , which are scrumming for a slice of the growing online travel market.
U.S. online travel sales are expected to reach $119.2 billion this year, up from $107.4 billion in 2011, according to eMarketer.
"It's been Google's overarching strategy to dominate the travel vertical," said B. Riley & Co analyst Sameet Sinha. "They want to dislodge these vertical search engines that may have gained over the last few years."
Shares of Yelp fell 7.7 percent to $23.87 on Monday after the deal was announced. Online travel website Expedia Inc's stock slipped 1.1 percent to $53.83. TripAdvisor fell 4.5 percent to $33.52.
Shares of Google, which on Monday announced plans to lay off 20 percent of its recently acquired Motorola Mobility business, rose 2.8 percent to $660.01. Wiley & Sons shares were off 1 cent, or 0.02 percent, at $47.58.
Last year, Google closed a $700 million deal to acquire ITA Software, which provides search technology to companies like Kayak Software Corp.
But Google's aspirations in travel are just part of its broader ambitions. For years, the company has tried to help broker commercial transactions between its roughly 1 billion monthly users and small, local businesses.
Google's local search efforts - headed by its high-profile executive Marissa Mayer until she left to head Yahoo Inc last month as chief executive - has been a priority for the search engine.
Since acquiring Zagat, Google has given more and more space on its search results page to business listings from Zagat, a practice that has drawn regulatory scrutiny and criticism from competitors like Yelp.
By teaming up with Frommer's, which publishes 350 titles and covers over 4,000 destinations, Google could further expand its reach internationally and beef up information on local hotels and tourist activities across the globe.
"They want to marry content with commerce, and content is an important part of that equation," said Sinha, the B. Riley & Co analyst.
In recent years, Google has not hesitated to offer top dollar for other properties that it believed could strengthen its local commerce offerings.
In December 2009, the company unsuccessfully offered more than $500 million to acquire Yelp. One year later, in late 2010, Groupon Inc, the daily deals company, turned down a $600 million offer from Google.
EUROPE ON $5 A DAY
For an acquirer like Google, the most valuable part of Frommer's is its extensive database of business listings and tourist hotspots that have been maintained and curated for years and can be integrated into Google's deep pools of data, analysts said.
"When Google buys Frommer's they're not really buying a book publisher or imprint, they're buying a database with both content and photography," Lorraine Shanley, president at Market Partners International, a publishing consulting firm in New York.
A Google spokeswoman said that over time, the company would integrate the content acquired from Frommer's with Zagat. But initially, Google will continue to offer the reviews of hotels, restaurants and sights across the world on the Web under the Frommer's brand name.
The spokeswoman said there was nothing to announce regarding whether Google would continue to publish the print guidebooks.
Wiley, which also publishes the "For Dummies" series, acquired the Frommer's line in 2001.
The publisher had been looking to offload Frommer's in recent months as it consolidates its business around its textbook offerings, said Morningstar analyst Michael Corty.
The latest acquisition by the Internet giant caps a 55-year journey for a series that first appeared in the early years of commercial air travel. In 1957, Arthur Frommer, a former U.S. soldier, released his European sightseeing book, entitled "Europe on 5 Dollars a Day," after fellow GIs snatched up a similar guide that Frommer had distributed while he was stationed in Germany.
Written in a breezy style and appealing to the budget-conscious, the slim book encouraged Americans across a broader economic spectrum to venture overseas in the flush Postwar era.
His guide, Frommer wrote in the first edition, was meant for American tourists who "own no oil wells in Texas" and have "never struck it rich in Las Vegas and who still want to enjoy a wonderful European vacation."
In the 1970s, tattered copies of Frommer's book accompanied a new generation of young American backpackers across Europe. And in the years since, other publishers like Lonely Planet have also found considerable success printing thick bound guides for the independent traveler. Lonely Planet is now owned by the British Broadcasting Corp.
But the golden days of travel book publishing may be over, given the rise of always-connected tablets and e-books that can be easily updated with the most current maps and listings, said Shanley, the publishing consultant.
"People still want to take a travel guide with them when they go on a trip, but presumably that will erode over time," Shanley said. "I'm not going to sound the death knell of travel books, but the expense of creating a new edition and then printing it and distributing it is becoming prohibitive." DM