Expedia hints at European acquisition

Expedia president and chief executive Dara Khosrowshahi has told investors in the US that that the business is in the market for deals to grow its international advertising and media operations.

He said: “We are looking for acquisitions in that area, but frankly there aren’t that many players of size left – we’ve bought them all! – but there are some players in Europe and/or Asia that might be attractive so we’ll continue to be opportunistic.

“That team has a great track record so when we’ve allocated capital to that team we’ve earnt it back pretty well.”

Khosrowshahi identified a number of reasons why TripAdvisor continues to perform so strongly. “The key driver for TripAdvisor is unit growth on a world-wide basis.”

He added that CPC’s are stabilizing; its international business is growing revenues faster than the domestic business; CPM-based banner and brand advertising from travel and non-travel businesses is coming back: and new businesses and products, such as TripAdvisor for air and B2B listings, were generating entirely new revenue streams.

The B2B listing initiative was “a multi-million dollar revenue stream already,” he added.

Khosrowshahi  was asked why Expedia continued to underform booking.com. He acknowledged that Expedia was growing outside the US “but not as fast as booking.com.”

He said that way to address this was to enhance Expedia’s supply of hotels, primarily through the venere.com agency model. He said supply investments would be a focus this year. “It’s also about the quality of the inventory – do you have availability for short booking windows? Is the pricing right?”

He went on to say that once the quality and quantity of the hotels on its books had improved , Expedia “has to get better at the variable marketing channels that booking.com is so good at, such as SEM and affiliate marketing”.

“In order to do this we need to get conversion up. It’s a combination of web site capabilities, how fast your site is and how attractive. We’ve made investments in the past which will improve our ability to drive web site conversion, once the supply is in place.”

He concluded by saying that the international opportunity was “huge” and that it wasn’t a “winner-takes-all” market.

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