Google's Travel Business Is Already Twice the Size of Expedia's
Skift Take
If publicly traded companies such as Google are bound by fiduciary duties to shareholders, then Google, which already has one of the largest travel businesses in the world, larger than the Priceline Group, TripAdvisor and Ctrip combined, would be foolhardy to shoot its advertising business in the foot to become an online travel agency.
When is Google finally going to tie all of its travel products together and become an online travel agency to rival Expedia, the Priceline Group and, increasingly, Ctrip?
Not anytime soon or even in the foreseeable future. We've been saying this for awhile -- for years, actually -- but now we can use some dollar estimates to back our theory and fine-tune it with comments on the subject that a Google executive made at the Skift Global Forum in Manhattan in September.
Why would Google want to become an online travel agency when its existing travel-advertising business -- including all of those paid links that dominate its search-results pages -- likely produces more revenue than the Priceline Group, TripAdvisor, and Ctrip combined?
One investor group dissected publicly available information, made some educated guesses, and confidentially shared its rough estimates with Skift on the scope of Google's existing travel-advertising business. Google would probably generate at least about $12.2 billion in revenue from travel advertisers in 2016, with about $6.2 billion of that coming from just four travel advertisers, namely the Priceline Group, Expedia Inc., TripAdvisor and Airbnb. [See the end of this story for how the $12.2 billion estimate of Google's estimated 2016 travel-advertising revenue was arrived at.]
To get an idea of the scope of Google's projected $12.2 billion in travel revenue for 2016, you can compare it with the actual 2015 revenue of the four leading, publicly traded online travel companies: The Priceline Group ($9.2 billion), Expedia ($6.7 billion), Ctrip ($1.6 billion) and
