TripAdvisor Inc. Earnings Call Nuggets: Expedia, Non-Hotel Traffic Opportunities
On Tuesday, TripAdvisor Inc (NASDAQ:TRIP) reported its first quarter earnings and discussed the following topics in its earnings conference call. Here’s what the C-suite revealed.
Ross Sandler – RBC Capital Markets: Just one quick question. Revenue from Expedia (NASDAQ:EXPE) came in at only down 4% year-on-year, much better than I think what we had talked about last quarter. I just wanted to get a little more color there, are all the CPC initiatives and decluttering fully baked in that number or is it just the new kind of established run rate that’s kind of down 4% year-on-year? Then a question on the non-Expedia customers of yours, that spend was about almost 40% year-on-year. Do you think that could see some acceleration as some of your non-Expedia advertisers get more aggressive throughout 2012 or is this the right run rate?
Stephen Kaufer – CEO and Founder: Thanks Ross for the question there. So on Expedia (NASDAQ:EXPE) pricing we feel like as the bidding marketplace has evolved, we’ve seen the changes that we would expect to see the site redesign is all done. Expedia has had plenty of time to adjust their bids to the new order if you will. So, Expedia lowered their pricing on the hotel clicks, but we’re also sending them fewer of the photo or map clicks which were much lower priced. So, net-net the Expedia rev was down a bit, but again, it’s highly variable depending on the type of the clicks that we send them with respect to the actual pricing. When we look at the non-Expedia revenue, obviously, with Expedia staying where it is the other clients are happily picking up the slack, the slack being additional volume. So, as a bidding environment when we move forward the degree to which we can grow our hotels to shopper traffic we have a high degree of confidence that there are plenty of customers very interested in those leads in all of our point of sale. We like it when there is a bidding war that we can get going in certain markets or certain regions but we haven’t baked in anything like that into our plan going forward.
Non-Hotel Traffic Opportunities
Heath Terry – Goldman Sachs: I was wondering if could give us a sense of type of traffic that you’re seeing from a mix perspective just as you see the restaurant activity, hotel mix shifting one way or the other and to what extent you see opportunities in monetizing that non-hotel traffic as it continues to grow?
Stephen Kaufer – CEO and Founder: Sure. Again, good question. The traffic mix – we’re talking about hotel shoppers and we are now disclosing to you that’s up 30%. ComScore up I think they said it was 39% and we said our internal log showed something similar. So, we’re giving you the notion that, well, yes we have a lot of our traffic on the site is hotel shoppers. The growth rate on the other stuff is clearly higher because it’s averaging out according to ComScore at 39. We’ve been clear, we don’t make much money. I mean we certainly sell CPM ads against all of it from sponsorships against all of it, but the click-based revenue comes primarily from the hotel shoppers. What I alluded to you at the end of my prepared remarks was that the business listing organization as it has been growing, we’ve clearly focused it on the opportunity for hoteliers because their return on the purchase of business listing is so straightforward, it’s so amazing and it’s a relatively easy for us to reach those half million hoteliers, relatively easy compared to the million restaurants and attraction some of who are frankly barely online. When you look out a couple of years, we project a continued growth in overall traffic, probably a higher growth in the restaurant and attraction type traffic, as we have more and more tourists on our site for all sorts of things. So, where we have eyeballs, we feel optimistic that we would be able to monetize them for attractions in restaurants and tour guys and other things to do once in destination. I don’t believe it will be as significant as what we can do for the hotelier, but we do think both on desktop and mobile that those will become valuable eyeballs to us in the future years, not so much in 2012.