In accordance with the CEO of TripAdvisor, Google is leveraging its “Web gatekeeping dominance” over journey web sites
Many in Silicon Valley may be angry about the Justice Department’s antitrust lawsuit against Alphabet’s Google, but some tech industry is cheering the move: online travel booking companies.
Stephen Kaufer, CEO of TripAdvisor, a longtime critic of Google, hailed the government’s decision to look into the tech giant. The DOJ and 11 Republican attorneys general are persecuting Google for allegedly illegally maintaining a monopoly on search by cutting off rivals from key distribution channels.
“We believe the DOJ is taking an important first step … long overdue, but welcome nonetheless. Google is leveraging its dominance in Internet gatekeeping at the expense of other companies,” Kaufer told CNBC in a telephone interview.
At this week’s GeekWire Summit, Peter Kern, Expedia CEO, said, “We have no ax against Google, other than we don’t think the market is fair.”
In a long blog post following the DOJ’s announcement, Kent Walker, Google’s chief legal officer, explained the company’s rebuttal against the government’s claims.
Online booking sites are the first to admit that Google’s preferred ranking of its own search results when consumers search for travel options has hampered their ability to drive traffic. In the past few years, Google has introduced a number of travel services – from Google Flight to Google Hotel Ads. TripAdvisor, Expedia, and Booking Holdings were originally the go-to places for securing travel before Google disrupted the industry.
When a consumer uses the Google search engine to search for the best hotels in London or flights from New York to London, the results shown above come from Google’s own travel portal, while other booking sites often rank lower, which is painful their ability to drive organic traffic. Google’s competition has prompted booking sites TripAdvisor, Expedia and Booking Holdings to increase their advertising spend.
Skift Research estimates the travel industry may have spent up to $ 16 billion or more on advertising on Google in 2019. Kaufer even went so far as to say that TripAdvisor, best known for its travel stories and content, is in a different position without Google. “I have no doubt that Trip would be a significantly bigger business today.”
However, due to the coronavirus outbreak, advertising budgets have been cut in 2020, and analysts don’t expect spending to return to pre-pandemic levels until travel bookings recover dramatically.
TripAdvisor shares fell more than 45% over the past 12 months at Thursday’s close. Expedia was down nearly 25% in the past 52 weeks, while Booking Holdings was down 9% over the same period.
Tour guides are now waiting to see what lawmakers will do next and whether the DOJ’s lawsuit will result in Google changing its search engine practices, which would be a potentially big win for the sector.
TripAdvisor, Expedia and Booking Holdings all report wins in the first week of November.