Google draws new battle line with Frommer's acquisition

Google is known as the search company that makes money on advertising -- nearly $38 billion in revenue for 2011. It's also a company that has tentacles gripping almost every corner of the digital world, competing with Apple, Microsoft, Facebook, Amazon, Yahoo, GroupOn, Expedia, Open Table, Yelp, Square, phone companies and a host of others.  It's a company that appears to know no boundaries in its quest to digitally reengineer the planet, other than those placed on it by government bodies. 

Google's latest grab, Frommer's travel guides, expands its content base in an market that has many competitors but is estimated to generate nearly $2 trillion in worldwide economic output. Combined with its 2011 Zagat restaurant review and ITA Software airline flight information acquisitions, Google has a foundation for delivering a more comprehensive and lucrative travel and entertainment "service," not just a search result. 

Google, since its inception, has been obsessed with delivering speed and efficiency for any online task, from simple search to maybe one day booking a trip to the moon on the company's own spaceship. In his April 2012 letter to shareholders, Google co-founder and CEO Larry Page articulated his vision for what Google and its 33,000 employees must do to be successful:

I have always believed that technology should do the hard work -- discovery, organization, communication -- so users can do what makes them happiest: living and loving, not messing with annoying computers! That means making our products work together seamlessly. People shouldn't have to navigate Google to get stuff done. It should just happen. As Sergey said in the memorable way only he can, "We've let a thousand flowers bloom; now we want to put together a coherent bouquet."

Consider Apple's 1987 Knowledge Navigator video an indicator of where Google wants to go with its "coherent bouquet."

The "coherent bouquet" ultimately evolves from delivering a series of blue links or booking a vacation via Google Travel to Google as the operating system, user interface and application suite for the Internet at large. The task will require far more content, like Frommer's and Zagat, to provide context, and community, in the form of social integration via Google+, to stimulate the commerce engine that drives Google's financial dreams. 

Then the question becomes at what point does the Internet as delivered by Google have too much Googliness. The company states its mission as facilitating "access to information for the entire world, and in every language." 

Search Google for the best restaurants in San Francisco, and you'll see that "access to information" is led by Google's Zagat. It doesn't always have center stage for this type of search, but it's clear that Yelp, TripAdvisor and other competitors can become less prominent in Google's search universe. 

The issue of a "level playing field" in search results was the topic of aSept. 2011 Senate subcommittee hearing that featured Google Chairman Eric Schmidt and some of his competitors. Yelp CEO and co-founder Jeremy Stoppelman outlined in his testimony how he believes Google competes unfairly:

Google is no longer in the business of sending people to the best sources of information on the web. It now hopes to be a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they are not.

The experience in my industry is telling: Google forces review websites to provide their content for free to benefit Google's own competing product - not consumers. Google then gives its own product preferential treatment in Google search results.

In his written testimony, Schmidt said, "... we built search for users, not websites, and no matter what we do, there will always be some websites unhappy with where they rank. Search is subjective, and there's no 'correct' set of search results. Our scientific process is designed to provide the answers that consumers will find most useful."

Sen. Michael S. Lee (R-UT) issued the charge that Google favored its own "secondary" products in its search results. "You've cooked it so you are always third," Lee stated. "Senator, I can assure you we have not cooked anything," Schmidt replied.

As long as Google has more than 65 percent share of the search market and continues to acquire content and make its products work more "seamlessly," competitors will be at a disadvantage on Google's platform. After the Google-Frommer's news, shares of Yelp were down over 7 percent. Yelp has taken steps to mitigate its losses on Google by joining forces with Apple and Microsoft. Yelp will be integrated in Bing local search and Apple's maps. 

Frommer's comes out a winner in this latest move, given it currently doesn't have much traction on Google search. It will likely get similar treatment to Zagat, which won't be good news to Fodor's (owned by Random House), Lonely Planet (owned by BBC Worldwide) and other travel guides. But this is the maturing world of the Internet, where the big get bigger and the small get eaten.