Google's Ad Expansion Met With Resistance From Expedia And IAC Chair: 'I'm On The Edge Of Revolt Now'

Barry Diller, the chair of IAC Inc. IAC and Expedia Group Inc. EXPE, previously voiced his dissatisfaction with Alphabet Inc.’s GOOG GOOGL Google’s advertising approach, hinting at an impending “revolt.”

What Happened: Diller addressed an email to Google’s high-ranking officials on Dec. 12, 2019, criticizing the search engine giant’s decision to augment the ad count on its results page. At the time, he argued that such a move adversely impacts companies like Expedia and IAC, which depend on equitable online visibility, reported Bloomberg. 

"I must say I'm on the edge of revolt now that Google's actions are so punitive, not just for Expedia but also for IAC and all the players that depend upon something of a level playing field," Diller wrote.

The email, forwarded to Google’s chief business officer Philipp Schindler, revealed that Diller’s companies spend nearly “6.5 billion dollars a year in media, the majority directed towards Google.” This email was later passed on to Google’s CEO, Sundar Pichai.

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Pichai, during his testimony at the Justice Department’s antitrust trial against Google on Monday, responded to Diller’s email. He justified the company’s increased travel listings, terming them “one of the most popular experiences we’ve built.”

Earlier this month, an ex-Expedia executive testified that the company’s advertising expenditure on Google had risen tenfold over five years. However, the increased costs did not lead to a surge in traffic following Google’s decision to display its own flight and hotel information.

Why It Matters: On Monday, while testifying, Pichai defended Google’s practice of paying billions to other tech firms, including Apple, to ensure Google remains the primary search facility on their devices. 

Pichai insisted that such payments aimed to provide a “seamless and easy” user experience, echoing his defense of Google’s increased travel listings. This ongoing tension underlines the power dynamics in the digital advertising space, where Google’s dominance continues to stir controversy.

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