Expedia Group Inc. on Thursday fell the most in 14 years, TripAdvisor Inc. dropped the most in two years while Booking Holdings Inc.’s shares dropped 8%, wiping out a combined market value of more than $13 billion from the three online travel agents. The companies put reported dismal third-quarter results and laid the blame on Google.
According to KrisHolten, Google is hammering one of the company’s biggest customers- the online travel industry, by cramming the top of its search results with more and more advertising. With at least three quarters of the market, it dominates the online search market. People use the search engine to research trips and vacations. Since a decade online the travel agents have refined their websites with trustworthy content and easy booking tools to show up high in Google results.
Until about five years ago, this search engine optimization or SEO worked well. Later, Google began placing more ads on the top of search results thus pushing down the free listings. It also built new travel search tools that were mostly paid listings meaning the online travel agents had to pay billions of dollars each year to Google to ensure they show up high in search results and get clicks from travel planners. Leading the online travel industry to be concerned about Google’s changes since at least 2016. The industry felt the complete impact this week.
TripAdvisor Chief Executive Officer Stephen Kaufer said during a conference call with analysts late Wednesday that Google has become more aggressive and they can see that it’s going to turn around. While Expedia Chief Executive Officer Mark Okerstrom said the same day that free traffic is “shrinking all the time” and Google continues to push for more revenue per visitor.
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