Google to acquire Frommer's travel guidebooks

Aug 13, 2012, 5:46 PM EDT

* Terms not disclosed

* Reviews to be under Frommer's brand

By Alexei Oreskovic and Gerry Shih

SAN FRANCISCO, Aug 13 (Reuters) - Google Inc isbuying the Frommer's line of travel guidebooks, the latest move to amass a trove of publishing content that could strengthen theNo. 1 Internet search company's push to become a major onlinetravel broker.

The sale by John Wiley & Sons Inc comes nearly ayear after Google's $151 million purchase of Zagat Survey, whichoffers reviews of restaurants, hotels and nightclubs in citiesaround the world.

Google and Wiley & Sons did not announce financial terms forthe deal, which is expected to close shortly.

The deal will meld the 55-year-old travel publisher's deepdatabase of hotels and sights into a search giant that isseeking to position its services across the entire trip-planningprocess, from searching for a holiday destination and looking uphotel reviews to booking tours and restaurants in far-flungcities.

As a result, analysts said, Google is increasinglythreatening 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 onlinetravel market.

U.S. online travel sales are expected to reach $119.2billion this year, up from $107.4 billion in 2011, according toeMarketer.

"It's been Google's overarching strategy to dominate thetravel vertical," said B. Riley & Co analyst Sameet Sinha. "Theywant to dislodge these vertical search engines that may havegained over the last few years."

Shares of Yelp fell 7.7 percent to $23.87 on Monday afterthe deal was announced. Online travel website Expedia Inc's stock slipped 1.1 percent to $53.83. TripAdvisor fell4.5 percent to $33.52.

Shares of Google, which on Monday announced plans to lay off20 percent of its recently acquired Motorola Mobility business,rose 2.8 percent to $660.01. Wiley & Sons shares were off 1cent, or 0.02 percent, at $47.58.

 

GOING LOCAL

Last year, Google closed a $700 million deal to acquire ITASoftware, which provides search technology to companies likeKayak Software Corp.

But Google's aspirations in travel are just part of itsbroader ambitions. For years, the company has tried to helpbroker commercial transactions between its roughly 1 billionmonthly users and small, local businesses.

Google's local search efforts - headed by its high-profileexecutive Marissa Mayer until she left to head Yahoo Inc last month as chief executive - has been a priority forthe search engine.

Since acquiring Zagat, Google has given more and more spaceon its search results page to business listings from Zagat, apractice that has drawn regulatory scrutiny and criticism fromcompetitors like Yelp.

By teaming up with Frommer's, which publishes 350 titles andcovers over 4,000 destinations, Google could further expand itsreach internationally and beef up information on local hotelsand tourist activities across the globe.

"They want to marry content with commerce, and content is animportant part of that equation," said Sinha, the B. Riley & Coanalyst.

In recent years, Google has not hesitated to offer topdollar for other properties that it believed could strengthenits local commerce offerings.

In December 2009, the company unsuccessfully offered morethan $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 ofFrommer's is its extensive database of business listings andtourist hotspots that have been maintained and curated for yearsand can be integrated into Google's deep pools of data, analystssaid.

"When Google buys Frommer's they're not really buying a bookpublisher or imprint, they're buying a database with bothcontent and photography," Lorraine Shanley, president at MarketPartners International, a publishing consulting firm in NewYork.

A Google spokeswoman said that over time, the company wouldintegrate the content acquired from Frommer's with Zagat. Butinitially, Google will continue to offer the reviews of hotels,restaurants and sights across the world on the Web under theFrommer's brand name.

The spokeswoman said there was nothing to announce regardingwhether 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 inrecent months as it consolidates its business around itstextbook offerings, said Morningstar analyst Michael Corty.

The latest acquisition by the Internet giant caps a 55-yearjourney for a series that first appeared in the early years ofcommercial 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 asimilar guide that Frommer had distributed while he wasstationed in Germany.

Written in a breezy style and appealing to thebudget-conscious, the slim book encouraged Americans across abroader economic spectrum to venture overseas in the flushPostwar era.

His guide, Frommer wrote in the first edition, was meant forAmerican tourists who "own no oil wells in Texas" and have"never struck it rich in Las Vegas and who still want to enjoy awonderful European vacation."

In the 1970s, tattered copies of Frommer's book accompanieda new generation of young American backpackers across Europe.And in the years since, other publishers like Lonely Planet havealso found considerable success printing thick bound guides forthe independent traveler. Lonely Planet is now owned by theBritish Broadcasting Corp.

But the golden days of travel book publishing may be over,given the rise of always-connected tablets and e-books that canbe easily updated with the most current maps and listings, saidShanley, the publishing consultant.

"People still want to take a travel guide with them whenthey go on a trip, but presumably that will erode over time,"Shanley said. "I'm not going to sound the death knell of travelbooks, but the expense of creating a new edition and thenprinting it and distributing it is becoming prohibitive."

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