War between Priceline.com Inc (NASDAQ:PCLN) and Expedia Inc (NASDAQ:EXPE) helps Google Inc. (NASDAQ:GOOG) - FB, TRIP, OWW

Northern, WI 03/13/2013 (avauncer) - For the first time Priceline.com Inc (NASDAQ:PCLN) has upped its annual ad expenditure to over $1 billion. This has now given it a lead over Expedia Inc (NASDAQ:EXPE) in the hotel-booking market and Google Inc (NASDAQ:GOOG) is the one who is benefiting from this rivalry. Priceline has primarily been successful due to the fact that it is able to manage its search campaigns more effectively. Over the past three years, Priceline.com Inc (NASDAQ:PCLN) has tripled its spending on internet advertising and the figure now stands at $1.27 billion.

Google beneficiary

Close to 90 percent of this amount goes to Google. Rapid global expansion combined with search spending has helped Priceline move ahead faster than Expedia and the latter now has to buckle up in order to catch up with its much larger rival. Contradictory to what Priceline does, Expedia Inc (NASDAQ:EXPE) does not break out offline and online ad spending. Its total ad budget had jumped in the past three years to 40 percent and in 2012 had touched $870 million. Close to 22 percent of last years Expedia revenue had been spent on advertising while Priceline had spent 25 percent.

Shifting their focus

Over the recent years, both these companies have trained their spotlight on hotels as the airline industry has been faced with dwindling margins and consolidation. This has had a direct impact on online agent profits. In 2005, Priceline bought Booking.com and a couple of years later it acquired the Bangkok-based Agoda.com. In part, Expedia’s growth has been boosted by its Hotels.com unit. They are pursuing their sales efforts in their European and U.S online hotel bookings segment.  Travel-related searches on the web have outdone shopping searches though Finance still stands first.

Priceline still ahead

Though big online ad spenders such as Tripadvisor Inc (NASDAQ:TRIP) and Orbitz Worldwide, Inc (NYSE:OWW) exist, Priceline has managed to outdo them all in this aspect. The company is concentrating a lot on online ads, but will not be giving up offline ads altogether. Till the point of time Google Inc (NASDAQ:GOOG) has big spenders such as Priceline as its clients it will continue to stand tall. But just as it supports these travel sites, it is also proving to be competition for them.

Not wanting to be left out of a lucrative and growing business, in 2011, the online giant introduced Hotel Finder which has accommodation search functionality and in some cases it even manages to bypass other web providers. It also now provides flight itineraries and prices via newly acquired software.

Shares of Priceline.com Inc (NASDAQ:PCLN) went down by 0.42% to close at $722.04

Shares of Expedia Inc (NASDAQ:EXPE) went down by 0.02% to close at $64.97

Shares of Google Inc (NASDAQ:GOOG) went down by 0.86% to close at $827.61

Shares of Facebook Inc (NASDAQ:FB) went down by 1.10% to close at $27.83

Shares of Tripadvisor Inc (NASDAQ:TRIP) went down by 0.49% to close at $51.15

Shares of Orbitz Worldwide, Inc (NYSE:OWW) went up by 4.26% to close at $5.39