Travelzoo 2003 Annual Report Download - page 22

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PART I
The information in this Report contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements are based upon current expectations, assumptions, estimates and projections about
Travelzoo Inc. and our industry. These forward-looking statements are subject to the many risks and
uncertainties that exist in our operations and business environment that may cause actual results, performance
or achievements of Travelzoo to be diÅerent from those expected or anticipated in the forward-looking
statements. Any statements contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. For example, words such as ""may'', ""will'', ""should'', ""estimates'', ""predicts'',
""potential'', ""continue'', ""strategy'', ""believes'', ""anticipates'', ""plans'', ""expects'', ""intends'', and similar
expressions are intended to identify forward-looking statements. Travelzoo's actual results and the timing of
certain events could diÅer signiÑcantly from those anticipated in such forward-looking statements. Factors
that might cause or contribute to such a discrepancy include, but are not limited to, those discussed elsewhere
in this Report in the section entitled ""Risk Factors'' and the risks discussed in our other Securities and
Exchange Commission (""SEC'') Ñlings. The forward-looking statements included in this report reÖect the
beliefs of our management on the date of this report. We undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes available or other events or
circumstances occur in the future.
Item 1. Business
Overview
Travelzoo Inc. is an Internet media company that publishes sales and specials for hundreds of travel
companies. As the Internet is becoming consumers' preferred medium to search for travel oÅers, we provide
airlines, hotels, cruise lines, vacation packagers, and other travel companies with a fast, Öexible, and cost-
eÅective way to reach millions of users. While our products provide advertising opportunities for travel
companies, they also provide Internet users with a free source of information on current sales and specials
from hundreds of travel companies.
Our products include the Travelzoo website, the Travelzoo Top 20 newsletter, NewsÖash, and the
Weekend.com newsletter.
More than 300 companies purchase our advertising services, including American Airlines, American
Express, Alamo Rent-A-Car, ATA, Avis Rent-A-Car, British Airways, Carnival Cruise Lines, Liberty Travel,
Delta Air Lines, Expedia, Fairmont Hotels & Resorts, JetBlue Airways, Kimpton Hotels, Marriott Hotels,
Caesars Entertainment, Spirit Airlines, Starwood Hotels & Resorts Worldwide, Royal Caribbean, United
Airlines, and US Airways.
Our revenues are generated from advertising sales. Our revenues have grown rapidly since we began
operations in 1998, primarily driven by an increasing number of travel companies listing their sales and
specials on the Travelzoo website and in the Travelzoo Top 20 newsletter. Our revenues increased from
approximately $84,000 for the period from May 21, 1998 (inception) to December 31, 1998, to approximately
$18.0 million for the year ended December 31, 2003.
Our principal business oÇce is located at 590 Madison Avenue, 21st Floor, New York, New York 10022.
Travelzoo was originally incorporated as Travelzoo.com Corporation (""Travelzoo Bahamas'') in the
Commonwealth of The Bahamas. In a ""Netsurfer Stockholder'' oÅering, Travelzoo Bahamas issued
approximately 2.6 million shares of its common stock to approximately 700,000 visitors who registered on the
Travelzoo website. No cash payments were required or received for any of the stock issued pursuant to the
Netsurfer Stockholder oÅering. The number of shares issued was increased as a result of a subsequent two-for-
one stock split.
In a series of transactions completed in 2002, Travelzoo Bahamas was merged into Travelzoo Inc., a
Delaware corporation, and each share of Travelzoo Bahamas was converted into the right to receive one share
2