5 years ago
 

Heart-stopping rumour of the decade (that might make sense): Google to buy TripAdvisor

Many will find it hard to name two companies that polarise opinion within the travel industry more than user review master TripAdvisor and search giant Google.

It is both their respective power and influence over so much of the world of online travel marketing and distribution which leads many to watch every move from afar with envy, rail against publicly or simply admire.

Which is why when a rumour along the lines of “Google might buy TripAdvisor” comes along there is a collective sharp intake of breath in many quarters.

The rumour is not exactly new. Talk of such a monumentally huge deal has dripped into conversations on countless occasions over many years, but it is certainly doing the rounds again – and with some intensity.

In the halls of ITB Berlin last week there were a number of occasions again where the likelihood of deal being brokered was discussed and, of course, what it could mean for the industry.

The subject even came up during a one-to-one session on-stage between PhoCusWright chairman Philip Wolf and new Booking.com CEO Darren Huston. Huston inevitably dismissed the question with the ease of a seasoned and well media-trained executive.

Fact or fiction?

At this stage it could be said that any such move by Google to acquire TripAdvisor is in the realms of fantasy and paranoia, depending on who you are.

Furthermore, there is about as much chance of either organisation commenting on such a piece of speculation as anti-Google lobbying group FairSearch deciding the search giant “isn’t so bad after all”.

And with both companies listed on public markets, even acknowledging such speculation exists would probably be enough to send their respective share prices in a frenzy.

But the industry – at senior and other levels – is certainly talking, nonetheless, which often means a number things: it’s completely true; there is a campaign to soften the sector by throwing discreet leaks to influential people; or the concept of a deal is mind-boggling that the chatter is exponentially increasing as a result.

Logistics

Any approach to acquire TripAdvisor would be complicated to say the least. Just three months into its first listing on the financial markets and with a market capitalisation of around $4.1 billion, TripAdvisor could be said to be enjoying life as public company, with its share price up by around a sixth since opening day.

Although it still has overlapping ownership with Expedia, TripAdvisor is now seen as a company independent in most respect from the former mothership, making it more attractive to a potential suitor.

However, a deal could trigger some kind of regulatory oversight from US authorities, not least when the likes of Yelp et al realise the consequences of it all.

Either way, despite Google probably having the cash to make an acquisition, whether it can be bothered with the regulatory headache is another matter entirely.

An acquisition would certainly be in the top deals completed by Google in its history –  Motorola Mobility ($12.5 billion in 2011), DoubleClick ($3.1 billion in 2007) and YouTube ($1.65 billion in 2006) are the top three.

Why does it make sense?

But the idea of Google buying TripAdvisor isn’t that outlandish.

The user review giant has so much of what Google needs, at least in terms of volume and influence in the world of travel content.

  • It is a highly influential (probably the most important) player in user generated content in travel, primarily in hotels but increasingly in other areas, such as vacation rentals, tours and activities, restaurants and other things-to-do in destinations.
  • It has ready-made and incredibly popular mobile applications, putting its services on the ground and in-resort, often where users never interacted with travel brands before.
  • It is a significant part of the search and purchase funnel in the hotel sector.
  • It has years of experience of working with hotels to generate millions for its ad model.

What would Google get (apart from that listed above)?

The increasingly influential Google Places pages, from a travel and tourism perspective, would be stuffed with content from a single source (thus the Yelp issues) but far closer to being comprehensive and uniform in their structure.

Content would be far easier to integrate into Google’s other travel products, those which exist now and those clearly on the table going forward (Google was never REALLY going to step at flights and hotels, right?).

Wrinkles in the idea

There are, of course, a number of issues around such a deal.

  • TripAdvisor remains a member of the FairSearch group.
  • The pair have fallen out spectacularly in the past over, ironically, Google Places (although they recently shared an exhibition stand at Mobile World Congress in Barcelona and are seemingly best buddies again, at least in some areas).
  • TripAdvisor has a very strong and evolving relationship with Facebook, Google’s arch nemesis in social networking.
  • Shareholders and management simply may not want to sell.
But, as someone said nervously last week, a move to acquire TripAdvisor actually makes more sense than Google buying ITA Software. “None of this messy flight search business – this would be all about content, which is where Google currently makes most of its money through the placing of PPC ads.”

What is most likely is that the rumour will stick around for a while longer, probably die down, only to reappear again in a few months.

Or, as someone else suggested last week, perhaps Facebook will be the next suitor for TripAdvisor?

NB: Shake hands image via Shutterstock.

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

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  1. Can Facebook REALLY Threaten Google in Search? | Cost2Go Blog

    […] is rumored to come from the travel industry.  Is it any wonder then that recently there have been rumors flying around regarding Google and Facebook expressing interest in acquiring […]

     
  2. Stuart McD

    So tweets like this don’t mean anything right?

    “GoogleTravel: Planning a trip? Stay at one of the top-rated @TripAdvisor hotels in New Orleans, NYC or Washington, D.C. – ow.ly/9HpKy” (https://twitter.com/#!/GoogleTravel/statuses/180674167639785473)

    What I don’t understand is why they’re not plugging the top rated hotel on Google Places… but then read the story, which is actually a USA Today PR regurgitation and as far as I can see (at a quick glance) there are no in context links to TA at all.

     
  3. Peter Daams

    I think you misfiled this Kevin – it’s not really “News” if it’s just daydreaming and speculation 🙂

    Will Tnooz break/create a rumour of Apple acquiring Tripadvisor next week as well? Or maybe a story about how great it would be if Facebook bought them? Or, to be fair, Microsoft deserves a mention too don’t they? Would be of great use to Bing I’d think and maybe a much better fit considering the FB connections.

     
    • Kevin May

      Kevin May

      @peter – hey, thx for chiming in.

      As you would imagine, we hear rumours almost on a daily basis about all sorts of things, and generally do not write about them.

      Our justification this time was two-fold. The “chatter” level in recent weeks has increased dramatically, also from people we know that have been on-the-button before.

      It was also mentioned on-stage at a large conference in Europe last week, triggering much of the analysis mentioned above.

      If a high profile figure at a conference can talk to the CEO of one of the biggest travel companies in the world about that issue, then I think it is right that Tnooz should explore the ramifications of it all to coincide with the chatter we’ve been getting as well.

       
      • Peter Daams

        Ok, so the “news” is that more people than normal are hypothesizing about this. And I’m sure now that Tnooz has written about it, even *more* people will be chattering.

        I’m trying to avoid the word rumour, because that’s not what this is – it’s just “what if” talk. Unless I missed something in the post, no-one’s actually claiming that they are in talks at the moment are they? Because that would classify as a real rumour. At least, according to my definition of the word “rumour”.

        Cynical thought though – if Google wanted to make this a more affordable prospect, then maybe they should tweak the algo a little, so TA doesn’t take up the entire first page of results like it frequently does at the moment. That should see the price tag drop a little.. 🙂

         
        • Kevin May

          Kevin May

          @peter – you see, this is why I’m in the media business and you’re in your business 😉

           
          • Peter Daams

            Hehe, right you are there 🙂 It certainly made me click through to read. But I do feel rather baited by it.

             
  4. Could Google kill holiday rental websites?

    […] broke a heart-stopping rumour this week that Google may be planning to buy TripAdvisor. Right now that’s all it is – a rumour. But with TripAdvisor having considerable interest in the […]

     
  5. Sergio Mello

    Dennis and Kevin, well said.
    Google is moving towards conquering every travel experience touchpoint.
    It is aiming at extending the meaning of the verb “to Google”, e.g. “to Google a flight”, “to Google a hotel”..
    Furthermore, the digital media landscape shifts faster than ever and so does user behaviour. Just imagine how many travellers are allegedly switching from FB Like to Pinterest Pinning.
    So Google may prefer securing a travel review market share by acquiring TA, rather than building their own competing product, only to see an achieved critical user mass being hypnotized away by the new thing just a year later.

     
  6. Dennis Schaal

    Dennis Schaal

    William: If Google has no interest in TripAdvisor’s “fake and slanderous content,” (your words, not mine) then why is Google still using snippets of TripAdvisor reviews on Google Place pages?

    Look at this Google Place page for the Renaissance Blackstone Chicago Hotel. http://t.co/9PpEyxUO

    Scroll down the page and below the 32 Google user reviews and you’ll see a link to 240 reviews from the dreaded TripAdvisor.

    Google will never catch up to TripAdvisor’s lead in user reviews and that’s why Google covets them.

    Also, I disagree with their being an antitrust issue with Google buying TripAdvisor, although I personally don’t think such an acquisition will take place.

     
  7. Gary Arndt

    Just think of the cost saving Google could have when they fire the SEO staff at Trip Advisor.

     
  8. Franke

    Back in the day, Google stopped its PPC “kick back” to Ad agencies, preferring to go direct to the Client. (Loosely) formalising a relationship with the Client and more importantly directly understanding the promotional desires, marcomms budgets and conversion patterns.
    Now progress this to the present day (aside from the obvious flight search/content/mobile/local and direct to customer opportunities), if you understand the brands marcomms budgets, and the conversion/search efficacy, you could reposition your pricing structure in a infinitely more efficient and effective manner..
    Your desire may only be to deliver the definitive the Travel Platform and sweep up the volume of nefarious ratings on said platform. =)
    Alternatively, you may wish to sell licenses to “authorised Agents” to use your Google/ITA software, bidding and review plaftform from the Cloud..

    Interesting times guys, and a great time to think about your brands customer experience and point of difference

     
  9. Matthew Barker

    A simultaneously terrifying and thrilling prospect for all the travel firms, especially hotels, those that rely on Google Places, organic search and TA reviews.

     
    • Tom Ouellette

      matthew,

      while not authenticated, there is a large enough majority of legit reviews to drive a fair reference point. besides the number of bogus negative comments shared by mean spirited people or devious competitors are probably a wash with the bogus positive reviews created by brand employees.

      also, many attempted reviews are kicked out for example if a review is posted from a hotel on its wireless network ip address regardless of whether it is a guest or an employee.

      the point is that there reach and presence grows, the level of authenticity becomes more reliable. google obviously sees this.

       
  10. Amarpreet Kalkat

    Hate to pass judgement like this when I would not know so much that folks on the inside would know, but I guess my interest in travel through the technology lens makes me judgmental here.
    So personally, I think a a $1.6b acquisition of a “cool” site in 2006 is a very different play than a possible $5b+ acquisition of a commoditized content site in 2012.

    But like I said, what do I know.

     
  11. Amarpreet Kalkat

    I would call a deal like that very symbolical of top companies that are beginning to slide downhill. I don’t think Google fits that bill yet, so would be very surprised to see that happening.Specifically:

    1. Content is commoditized. An intelligent, passionately made travel product can blow away TA’s content advantage in months. Lets remember all those “we now generate more content in a day that we used to….” statements.
    2. TA does not fit into Google’s DNA. Google is a technology company. TA is not. It’s a pretty big difference.

     
    • Kevin May

      Kevin May

      @amarpreet

      all fair comments.

      this is less to do with whether a company has a correct DNA match – more to do with what fits into Google’s overall strategy to take search and content (esp around mobile and destinations) to a different level.

      Did Google buy YouTube for its technology? Of course not, it bought it for the eyeballs and the content and the integration.

       
      • Peggy Lee

        I agree with Kevin re: Google’s overall strategy. And I do not believe Google is a technology company. It’s all about search and content. Air search+content = ITA. Hotel search+content = TripAdvisor. That pretty much covers the major the travel category for Google don’t you think. Integrate it all with YouTube for destination content and you’ve pretty much got the travel vertical covered.

         
        • Jonathan Meiri

          I agree as well. Content that leads to a reservation is right up google’s alley. It would be similar to the Yelp acquisition they were considering a while back (they ended up buying Zagat).

          Interested to hear what the folks at Kayak have to say, as they recently included TA reviews in their search.

           
      • Joe Buhler

        Exactly. Google is a technology company that doesn’t have to buy any other for reasons of technology, except maybe a minor start-up which can provide a missing piece instead of building it. Buying TripAdvisor for content and eyeballs, like YouTube, would make a lot of sense. My hunch is Facebook might be interested in an acquisition after their IPO.

         
    • William Frederics

      No chance in my opinion.

      Google wants reliable and authentic content for its ad platform. This is evident by its purchase of Zagat.

      TripAdvisor content which is not authenticated is full of fake and slanderous (to travel companies) reviews.

      I don’t see a fit here at all.

       
      • Alex S

        I’m not quite sure I agree with you William.

        Google tried to buy Yelp for I believe 500 million in late 2009…so while their strategy may have changed since then I don’t agree with the statement that they are not interested in buy a company specializing in UGC

         
 
 

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