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Online Travel: How Google Wins Even If It Loses

03/28/2014| 12:43:00 AM| 中文

There’s hardly an area of technology or digital content in which the incumbents don’t fear Google (GOOG), which, due to its domination of Internet search, can have a big say over where on the Web curious consumers wind up.

Online travel is among the areas Google is throwing its weight around. Go ahead and Google Hong Kong hotels, and you’ll see something that didn’t exist a few years ago: a horizontal stripe across the top of the page of actual hotels, drawing users’ eyes away from the listings of a normal Google search, the stuff that appears below, which is largely online travel agencies. Click on hotels in the stripe and you’ll be led to a reservation system of sorts, one in which Google gets more income.

That has to be frustrating to online travel companies who are among Google’s best customers. Priceline (PCLN) spent $1.8 billion last year on online advertising; though it doesn’t break down where that money went, one surmises Google got the biggest share, either directly or indirectly (as we’ll explain below). Expedia (EXPE) spent $1.2 billion on all kinds of advertising (online and offline) last year, and we’re guessing again that Google got more of that money than any other player. TripAdvisor (TRIP) spent $236.5 million on ads last year. And there are several more huge players advertising heavily to attract eyes online.

Airlines, car rental outfits, individual hotels, hotel chains, meta-search travel outfits like Kayak (owned by Priceline) and many other travel players all get huge portions of their business via Internet searches dominated by Google. In recent years, those advertising dollars have become less efficient, as competition has increased, so Priceline and others spend a higher percentage of revenue on ads as time goes on.

Read full story at:http://ycharts.com/analysis/story/online_travel_how_google_wins_even_if_it_loses

TAGS: Google | Online Marketing
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