TripAdvisor to become public company

Online travel company Expedia’s Board of Directors has preliminarily approved a plan to separate Expedia, Inc. into two publicly traded companies:

Published: 08 Apr 2011

Online travel company Expedia’s Board of Directors has preliminarily approved a plan to separate Expedia, Inc. into two publicly traded companies:

  • TripAdvisor, which will include the domestic and international operations associated with the TripAdvisor Media Group, which includes its flagship brand as well as 18 other travel media and advertising brands, and
  • Expedia, Inc., which will continue to include the domestic and international operations of the company’s travel transaction brands including,, eLong, Hotwire, Egencia, Expedia Affiliate Network, CruiseShipCenters, Venere, Classic Vacations and

The company’s revenue increased 13 percent in 2010, primarily driven by an increase in hotel revenue and advertising and media revenue. Advertising and media revenue increased 36 percent for the year, driven by a 48 percent increase in third-party revenue for TripAdvisor. As a percentage of worldwide revenue for 2010, hotel accounted for 63 percent, advertising and media accounted for 13 percent, air accounted for 12 percent and all other revenue accounted for the remaining 13 percent.

The company stated: “It is anticipated that the transaction will take the form of a distribution of stock of TripAdvisor to Expedia stockholders or a reclassification of Expedia stock, with the holders of Expedia stock receiving a proportionate amount of TripAdvisor stock, in either case in a tax free transaction. It is expected that Expedia’s dual-class equity capital structure and the governance arrangements between Barry Diller and Liberty Media will be mirrored at TripAdvisor following the transaction.”

“The transaction is subject to a number of conditions including final approval by Expedia's Board of Directors of transaction specifics. In addition, it is expected that Expedia will seek stockholder approval of the transaction.. The proposed spin-off is expected to be completed in the third quarter of 2011.”

According to a report filed by, in December, Diller and John C.. Malone of Liberty Media reached an agreement to separate their mutual interests, with Liberty giving up its voting stake in IAC for cash and two business units. But Diller and Malone remained intertwined at Expedia, in which Liberty holds a 17.6 percent stake.

Frederick Moran, analyst at Benchmark Capital, according to Dow Jones, said the transaction will unlock shareholder value by enabling the market to recognise TripAdvisor’s strong revenue growth, which tends to be overshadowed by Expedia’s sluggish performance. Moran reportedly highlighted that Travelzoo, which publishes travel, entertainment and local deals, trades at almost 64 times earnings, far higher than Expedia at about 12 times.

“If [TripAdvisor] can just capture a little bit of TravelZoo’s multiple, they will be creating value for Expedia shareholders,” said Moran. “I don’t think Expedia loses anything strategically or competitively, but shareholders get the benefit of having the value of TripAdvisor unlocked.”

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