Airbnb claims its traffic has been ‘adversely affected’ by Google’s search algorithm, accusing it of favoring the tech giant’s own competing travel sites and cites it as a ‘risk factor’ in its IPO filing
- Airbnb claims its traffic has been ‘adversely affected’ by Google’s search tool
- The company accused Google of favoring its new travel services, Google Travel and Google Vacation Rental Ads
- The claims were listed as ‘risk factors’ included in Airbnb’s IPO filing on Monday
- Airbnb, which delivered $219million profit in the third quarter, plans to go public next month
Airbnb has claimed its internet traffic has taken a hit due to Google‘s search algorithm, as it accused the tech giant of favoring its own competing travel services on its search engine.
The San Francisco-based vacation rental company, which is preparing to go public next month, submitted its initial IPO filing on Monday including a list of ‘risk factors’ the business is facing.
Among them is the increasing competition from search engines including Google, which has been using its own services to promote new travel sites Google Travel and Google Vacation Rental Ads.
‘We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,’ Airbnb said in their prospectus.
Airbnb Inc. on Monday filed its initial IPO with the SEC to go public as soon as December
The company included claims that its internet traffic has been ‘adversely affected’ by Google’s search tool
‘To the extent that our brand and platform are listed less prominently or fail to appear in search results for any reason, we would need to increase our paid marketing spend which would increase our overall customer acquisition costs and materially adversely affect our business, results of operations, and financial condition.’
The company said its advertising and marketing strategies rely on unpaid channels such as search engine optimization (SEO) which can allow its listings to appear more prominently on search results.
Changes to search engine algorithms could negatively affect Airbnb’s search-engine rankings and traffic to its platform, the company said.
‘If Google or Apple uses its own mobile operating systems or app distribution channels to favor its own or other preferred travel service offerings, or impose policies that effectively disallow us to continue our full product offerings in those channels, there could be an adverse effect on our ability to engage with hosts and guests who access our platform via mobile apps or search.’
Airbnb said it believes its SEO results have been ‘adversely affected’ by the launch of Google Travel and Google Vacation Rental Ads (pictured)
The company’s claims follow the Department of Justice’s decision to sue Google last month, accusing the tech giant of unlawfully maintaining a monopoly to preserve its position as the ‘gatekeeper to the internet’ and stop any would-be competitors from even coming close to having a bite of the market.
The complaint alleged that Google dominates the market unfairly by making billions in ad revenue then using the money to cement its presence on smartphones and devices with ‘exclusionary’ deals with the likes of Apple, Samsung, LG to ensure it is the only search engine promoted anywhere.
Google later responded to the lawsuit saying it was ‘trivially easy’ to change an internet browser and that the Justice Department was ‘deeply flawed’.
‘This isn’t the dial-up 1990s when changing services was slow and difficult, and often required you to buy and install software with a CD-ROM,’ Google’s SVP of Global Affairs, Kent Walker said in a condescending memo.
‘This lawsuit claims that Americans aren’t sophisticated enough to do this. But we know that’s not true,’ he said.
Google CEO Sundar Pichai has insisted in the past that the company runs fairly
The DoJ is invoking The Sherman Act which is designed to stop businesses from blocking competitors from the market.
Earlier this week Airbnb revealed it delivered a $219million profit in the three months ending in September, but nonetheless lost $697million in the first nine months of the year amid a 32 percent revenue drop as the COVID-19 outbreak crushed the travel sector.
In its first public release of its financial data, Airbnb said its home-sharing model has been ‘resilient’ compared with others in the sector during the crisis.
‘People wanted to get out of their homes and yearned to travel, but they did not want to go far or to be in crowded hotel lobbies,’ the document said. ‘Our platform has proven adaptable to serve these new ways of traveling.’
Airbnb revenue slipped to $2.5billion in the first nine months of 2020 from $3.7billion a year earlier. Its losses for the nine-month period were roughly in line with last year’s level.
The company has had mostly losing quarters, according to the filing, but has reported profits in the third quarter of each year from 2018.
But Airbnb said its unique business model has proven to be valuable both for hosts and travelers seeking a safe environment during the global health crisis.