The Internet wampum game is a thing of the past. We saw it in the contrast Monday, when Google (GOOG) said it would pay $23 million for Frommer's travel guides from John Wiley & Sons -- while, at the same time, Groupon (GRPN) dove on an earnings miss. This reminded us that Google once tried to buy Groupon for $6 billion. The company is now valued at $4 billion.
Now, with Frommer's and Zagat -- the latter of which Google bought for $150 million a few years ago -- Google can become the ultimate travel site. Perhaps it will trump one of two really successful social media companies, Yelp (YELP), which Google failed to acquire for $500 million not that long ago. Yelp is now worth $1.5 billion, but with these two acquisitions for $183 million, Google is in shape to cut Yelp down to size.
Google is a really smart and lucky company. It skipped over buying this newly minted group of social companies in order to develop its own, which could end up being the most powerful and comprehensive of all. As much as the social check-off from Yelp helps, Frommers and Zagat represent formidable offline franchises that are respected but valued way too cheaply because they haven't been caught up in the frenzy.
I don't know what Groupon is really worth. It seems very faddish now, and the fatigue is setting in for fair deals. Now we want to go to the best places that are verified by pros that can also have comments and be put on mobile devices. It is much easier to cobble proven offline properties than it is to buy faddish online franchises, if you can call them that.
The irony of the $23 million Frommer's deal, vs. the aborted $6 billion Groupon bid, should not be lost on anyone. I think Groupon could be worth a fraction of what it sells for if the daily deal concept has been as fleeting as it looks, even as it is very labor-intensive.
Seems like a steal.