Google's Travel Biz Worth An Estimated $100 Billion

Google's plan to dominate the travel business with search, referrals, recommendations and online advertising buys through AdWords seems to be working. One analyst firm suggests Google's travel business worth is about $100 billion.

Google's U.S.-booked air volume rose 13.6% year-over-year to $159 million, according to one report.

At $100 billion, Google’s travel business contributes about 15% to Google’s $650 billion market cap, according to Skift Research.

Here's how analysis from Skift Research comes to this conclusion by analyzing financial disclosures for the first half of 2017 and full-year 2016, and estimating how much these companies spent on Google.

The research group estimates that metasearch engines like Kayak and Trivago will spend 25% more, helping Google's travel business to generate about $14 billion in revenue in 2017.

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Priceline spent 23.5% more on advertising during the six months of 2017 compared with the prior year, which puts digital ad spend on pace to reach $4.3 billion in 2017, according to the research. And while Expedia does not disclose quarterly ad spend, the research note mentions it does disclose direct marketing costs -- which rose 28%, putting Expedia's digital ad spend at about $2.9 billion.

Priceline, which broke down its online and offline advertising in 2016 filings, recently changed to performance advertising from brand advertising such as TV. The research firm uses performance metrics as a proxy for online spend. Figures suggest that Priceline spent 92% of its ad budget online.

And with a few numbers on hand within Expedia's footnotes in its financial statement, Skift analysts estimates Expedia spent 85%. Factored into that number, research from Skift analyzed Expedia's exposure to Trivago’s television push.

Combined, Priceline and Expedia likely spent $5.8 billion on digital advertising in 2016.

The analysis also factors in hotels -- with Airbnb specifically at about $1 billion, and other travel agencies amounting to about $5 billion in Google ad spend in 2016, which includes AdWords. 

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