Inside Google

Google acquired Frommer’s brand of travel guides from Wiley & Sons last week, in a deal reportedly worth $23 million. While the actual acquisition is small by Google’s standards, it is another big indicator Google plans to continue building their business as a publisher of unique content.

Wiley’s announcement of the sale read, “On August 10, 2012, Wiley entered into a definitive agreement to sell all of its travel assets, including all of its interests in the Frommer’s brand, to Google.”

“The Frommer’s team and the quality and scope of their content will be a great addition to the Zagat team,’’ a Google rep told the Financial Post. “We can’t wait to start working with them on our goal to provide a review for every relevant place in the world.”

Yelp Stock Down in Light of Google-Frommer Acquisition

At one point, Frommer’s were the premier travel guides; that is, until Lonely Planet came along to dominate the scene. Google reportedly plans to combine Frommer’s with their Zagat reviews. Last year, Google acquired Zagat and earlier this summer, integrated Zagat reviews with the merged Google+ Pages/Places.

Google’s foray into publishing local reviews is bad news for Yelp, whose stock plummeted after the announcement. Yelp was sitting at $20.17 a share as of this writing, substantially down from their 52-week high of $31.96. Just before Google announced the Frommer’s deal, Yelp was trading at over $26.

Google used to pay Yelp in order to use their reviews on Google Maps. That ended when Yelp became unhappy with what they said was Google’s practice of promoting their own pages over those of others.

Google actually tried to buy Yelp in 2009, though the deal didn’t go through. By September 2011, Yelp was testifying against Googlein the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Consumer Watchdog, FairSearch.org Asking for FTC Intervention

Yelp aren’t the only ones unhappy about the Frommer’s deal. Consumer Watchdog is calling on the FTC to block the acquisition.

“There is a fundamental conflict between being a search provider and a content provider,” Consumer Watchdog Privacy Project Director John Simpson told The Inquirer. “As Google has increased its content and services, it has unfairly favoured them in its search results and damaged competitors. It makes absolutely no sense to approve this deal.”

FairSearch.org, a group of companies including Microsoft, Expedia, and TripAdvisor, among others, released a blog post about Google’s latest acquisition. It read, in part:

“As Google expands beyond general search into content development in key search verticals, FairSearch.org encourages government officials to look closely at its ability to use its dominance in search and search advertising to steer users away from competitors in order to keep users on Google’s own pages longer, and the potentially devastating effects that could have on the online economy.”

Can Google Do Fair Search and Create Content?

Forbes staff writer Jeff Bercovici doesn’t think it’s even a question whether Google has become a media empire. He takes a stab at what Google will do with Frommer’s in a recent article:

“…the obvious guess is that Google will Zagat-ize Frommer’s, de-emphasizing professionally-produced content in favor of user-gen stuff, which is both cheaper to produce and more in keeping with its traditional competencies. For the moment, however, Google is, at least in a small way, unarguably a media company.”

This raises the obvious question, he says; one that has been on the minds of many as complaint after complaint has rolled into the FTC: “How long can Google be a fair arbiter of all the world’s information when it increasingly has information of its own that it wants to promote?”

The New York Times published previously unpublished quotes from Eric Schmidt, who was CEO at the time he is reported to have given the interview in 2010. According to the NYT, Schmidt said Google is “careful to define a line where we don’t cross into content” and wanted to remain a “neutral platform for content and applications.”

That line seems to blur more every day. Whether the FTC will heed the warnings of groups like Consumer Watchdog and FairSearch.org remains to be seen. For now, companies like Yelp and TripAdvisor have every reason to feel threatened, as the giant of the web encroaches further into their business model.