Following Expedia’s recent first quarter results, in which its net income took a dip, there are reports related to onlin

Following Expedia’s recent first quarter results, in which its net income took a dip, there are reports related to online travel company placing its ad account under review.

Published: 18 May 2006

Following Expedia’s recent first quarter results, in which its net income took a dip, there are reports related to online travel company placing its ad account under review.

“Online travel service Expedia.com today said it would place its ad account in review. The Seattle-based client, which spent $170 million in domestic measured media last year, per TNS Media Intelligence, has used Interpublic Group’s Deutsch/LA in Marina del Rey, Calif., for creative and media chores. Deutsch, which has handled Expedia since the client’s inception seven years ago, said it would not defend,” reported adweek.com

“This is like your car breaking down and pointing the finger at your financial advisor,” Mike Sheldon, managing partner and general manager of Deutsch/LA, reportedly said, as per the same report. “We had them for seven years and watched the company grow from zero to $10 billion. We know we had something to do with that growth and that’s a source of pride for us. I'm really proud of the work we've done over that time.”

Last week, the company had shared that its net income fell by 51.5 percent to $23.3 million, or six cents per share, hindered by lower margins on domestic hotel bookings, higher airfare and lower revenue per plane ticket.

Dara Khosrowshahi, Expedia, Inc.’s chief executive officer and president, had said recently: “Needless to say we are disappointed with our financial performance this quarter, and we are focused on tactical actions -- including a shift of our marketing approach -- to drive improvement in our results for the balance of the year.”

“At the same time, we continue to make real strides in our integration, data warehouse and technology platform efforts, which we anticipate will yield the bulk of their benefit in 2007 and 2008.”

The company in January launched the branding campaign “Enjoy Your Trip”, which promised customers that if they booked travel on the site and found a better price online within 24 hours, it would refund the difference, plus a $50 travel voucher. Khosrowshahi, according to seattletimes.nwsource.com, said the marketing campaign increased awareness and improved traveler’s attitudes about Expedia, but didn’t draw enough shoppers to the site during the quarter. The company also experienced weaker-than-expected traffic from third-party channels, including MSN.comand its private-label business. The sites combined drove 30 percent less transaction volume during the first quarter in comparison a year ago.

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