TripAdvisor, going public tomorrow after 11 years in business, seeks a higher profile in travel industry
Eleven years after it began life above Kosta's Pizza in Needham, and seven years after it was acquired by Barry Diller's InterActive Corp. for about $200 million, TripAdvisor is finally gaining a NASDAQ listing of its very own. The company starts trading tomorrow under the symbol TRIP, and it will also be included in the Standard & Poor's 500 index. (TripAdvisor is being spun out from Expedia, which itself was spun out of InterActive Corp. in 2005.) With 1,172 employees, and $486 million in 2010 revenue, TripAdvisor is by far the biggest consumer Internet company in Boston.
The company is throwing parties in New York tonight for advertisers, business partners, and even some of the site's most prolific reviewers, and tomorrow, TripAdvisor chief exec Steve Kaufer is giving a 90-second speech at NASDAQ headquarters, then ringing the exchange's opening bell.
Being public will give TripAdvisor a higher profile in the travel industry, and Kaufer says it could also help the company recruit. "We're hiring in every department across the board," he says — especially in engineering. The company operates TripAdvisor.com and 18 other travel sites, which collectively attract 40 million visitors a month. No one else runs a bigger network of travel sites.
Kaufer has no gripes about TripAdvisor's time under the IAC and Expedia umbrellas, but acknowledges that "our success was overshadowed to some extent," and having to adhere to corporate policies and rely on services from headquarters "reminded people that we were part of a larger entity."
TripAdvisor was one of the earliest Internet companies to build an empire upon user-generated content, by encouraging travelers to review hotels, restaurants, activities, and attractions. Relying mainly on advertising and referral fees from various travel booking services, TripAdvisor continues to grow at quite a clip: for the quarter ended in September, TripAdvisor revenue increased 30 percent, to $181 million; revenue at Expedia, by comparison, rose 14 percent. TripAdvisor also has heftier profit margins than Expedia.
"It's great to be a standalone company, and it's great to be the consumer brand in Boston," Kaufer says.
I asked Kaufer about the potential IPO of Kayak.com, the more transactionally-oriented travel site, which has its technology headquarters in Concord. "It's a good product, and they're a local success story," Kaufer said. He said he didn't think Kayak was vying for the same advertising and referral revenues as TripAdvisor — "our clients would happily spend more money with both sites if both sites had more traffic" — but he did acknowledge that "we are probably recruiting the exact same set of engineers."
At TripAdvisor, he said, "when we think about the thing that would most move our success needle in future years, hiring top tech talent is always at the top." In the Boston area, TripAdvisor maintains three separate locations, in Newton, Charlestown, and downtown Boston.
IAC chairman and CEO Barry Diller remains the controlling shareholder of TripAdvisor, and will serve as the company's chairman.
Starting Wednesday, TripAdvisor will be one of the highest-profile companies in the online travel industry, and certainly the biggest star in Boston's travel constellation, which includes Kayak, ITA Software (now owned by Google), and smaller start-ups like Hopper and WaySavvy.
Earlier this year, I had Kaufer on a panel. He and several other local entrepreneurs talked about the "Secrets to Success." Audio is here.
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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