Google to Acquire Frommer's
Internet search engine company Google (NASDAQ: GOOG) is set to acquire Frommer's Travel Guides from publisher John Wiley & Sons (NYSE: JW.A)(NYSE: JW.B).
Though the deal is yet to close, The Wall Street Journal reports that Google will pay roughly $25 million for Frommer's in hopes that the acquisition will generate more advertising dollars.
It was only in June that John Wiley reported a better-than-expected fourth-quarter profit. The company rose to $48.3 million (or $0.80 per share) from $28.6 million (or $0.46 per share) in the year-ago period. Company revenue gained 2 percent, boosting it to $454.6 million.
Benzinga also reported in June that John Wiley was one of the top four stocks in the book publishing industry with high dividend yield. The company had a dividend yield of 1.80 percent.
Google's latest deal to purchase Frommer's could see the company generate a lot of advertising revenue as it sells travel-related ads that sit perfectly alongside the travel guide content.
Last year, Google acquired Zagat Survey and incorporated the business reviews produced by that service in to the Google+ listings. Presently, it is unknown whether or not Google intends to do something similar with Frommer's.
It does seem as if Google is going against its early strategy of pointing to content rather than producing it. The company recently purchased an equity stake in Machinima which creates video content for YouTube.
Barrons revealed on Tuesday that Google is cutting about 20 percent of the workforce at Motorola after acquiring Motorola Mobility for $12.5 billion three months ago.
Google is desperate to make Motorola profitable again, which of course pleases analysts and investors.
Ultimately, Google appears to diversify a little more every day. Once a simple search engine, "Google" is now a commonly used verb meaning "to conduct an online search." Yet the company continues to do so much more, as it is involved in the mobile phone industry, social networking, creating video content and now travel guides.
You have to wonder what Google will do next.
On Tuesday, Google traded at about $660, up roughly 2.8 percent.
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