Expedia mulls launch of meta search engine

Martin Cowen
Martin Cowen
February 20, 2009 11:23 AM GMT

Expedia Inc has confirmed plans to launch a flight meta search product during 2009 as it continues to build up its range of advertising options to travel suppliers.

Chief executive Dara Khosrowshahi, talking through Expedia's Q4/FY08 results with analysts, explained that there is some price pressure on TripAdvisor's CPC rates.
"We are looking at the advertising and media area from a bigger picture while we are seeing CPC pressure," he said.

"What we are trying to do is increase the addressable market for advertising and media segment, which is why you are seeing us going to meta search."

Under the TripAdvisor banner, Expedia is also looking to improve its vacation rental channel on TripAdvisor. It is also launching a user generated content site in China under the dowdow.com URL.

Revenues from its advertising and media business during the last three months of 2008 were 29% ahead of Q4 07, and accounted for 11% of Expedia Inc's total, its highest ever share. For the full year, ad revs were 55% up on 2007, accounting for one-tenth of the total.

Its core travel business appear to have held up well during what chairman Barry Diller described as "a historically difficult demand environment". Air tickers sold was flat over 2008, although at the half way stage it was 8% ahead.

Capacity cuts and soft demand in the second half cancelled out these gains. Nonetheless, it managed to lift revenue per ticket by 2% during the year.

Hotels meanwhile had a busy year, particularly in Europe where the integration of venere.com has taken the number of hotels on Expedia's books to 99,000 worldwide, 48,000 of which are in EMEA. The number of room nights sold increased by 13% during 2008. Expedia's revenue per night was down 6%, but the increased demand saw total revenues up 6%.

Khosrowshahi said that both expedia.com and hotels,com in the US had achieved a double-digit improvement in traffic, thanks to a changed approach to search engine optimisation, with the CEO expecting " a substantial improvement" in Europe. Conversion rates are also improving, particularly at hotels.com in Europe.

CFO Michael Adler told analysts: "On the acquisition front, we did use about $500 million in cash in '08. In '09, I would say we don't expect the same level of activity or near the same level of activity. The market prices for deals, we don't yet think really reflects the value of businesses, but we will continue to be opportunistic and look at things as they come up."

Overall, gross bookings for Expedia Inc worldwide in 2008 came in at $23bn+, 8% ahead of 2007.

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