Now that the online travel companies are battered to bits by the economic impact of the COVID-19 pandemic, Google seems set to bury them for good. With massive capital tied up in refunds and bookings in limbo, OTAs and other digitally powered travel entities are fragile like glass these days. And Google has a knee on the necks of companies like GetYourGuide, Airbnb, and Travago.
The “lever” Google seems to be applying is the company’s demand for advertising payments at a time when many corporations are vying for temporary forgiveness until some stability sets in. According to the heads of these companies, Google is taking the hard-negative approach instead of supporting valuable partners. But demanding payments like a slum lord of digital travel is not Google’s only strike on GetYourGuide and the others.
According to Co-Founder and CEO of GetYourGuide Johannes Reck, Google is also launching competitive services at the same time the giant internet monolith is demanding immediate payment of outstanding ad bills. This story at CNBC reveals the lengths Google seems ready to go to in order to strengthen its position during a crisis.
Anyway, a letter authored by the German Start-ups Association (The Bundesverband Deutsche Startups) and signed by eight travel start-ups including GetYourGuide and Trivago seems to have had no effect on the company that just declared $41.1 billion in revenue.
Here’s the thing. GetYourGuide and a host of other companies pay millions for their search ads. Google would not exist if not for these revenues. And now, just when you’d think the Mountain View giant would cut partners some slack, they seem to be stabbing some in the back. Google has a 90% share of search traffic in Europe, which means the hurting startups either have to pay or close their doors. Sounds like a mafia business, doesn’t it? Yeah, and at a point, Google froze GetYourGuide’s ad account.
Of course, Google legal probably instructed the executives in charge of these clients to strike some kind of deal on forbearance, but Google’s idea was to create an unreasonable plan for repayment and reduced ad spend. This all takes place while Google quietly releases what Skift’s Dennis Schaal says is a “game-changing tours and activities advertising product.”
The European Commission, the EU’s executive arm, will soon have to decide whether to investigate the GetYourGuide/Trivago case. Meanwhile, TechCrunch reports on the antitrust drumbeat continues to pound on tech giants, and the U.S. Justice Department moving “full-tilt” on an investigation of Google parent Alphabet over anti-trust issues.
Finally, PhocusWire discusses how the whole ecosystem is in trouble, which is the root of the problems online travel businesses are experiencing. The COVID crisis has ripped the wounds off a system with more flaws than a milky South African diamond. But the end of that story seems to be “business is just unfair overall.”
Finally, the U.S. Antitrust Case against Google is now focused on the company “tying” or bundling products together in order to block out competitors and give the seller an unfair advantage. The long and short of this is about Google navigating the shoals of legality like a snarky, evil Magellan. U.S. regulators will soon file a competition suit against Alphabet Inc.’s Google. Experts say it will be the largest monopoly case since the government sued Microsoft back in 1998. See the Bloomberg Law story here.
As a last note, Yelp CEO Jeremy Stoppelman says Google and other companies are “the gateway to information, period. And they’re essentially completely unregulated.” And I guess you know I agree with him.
