TripAdvisor 2012 Annual Report Download - page 26

lack of growth in the market for various online advertising models could have an adverse effect on our business,
financial condition and results of operations.
In addition, if advertisers materially change their transaction attribution models or their return on investment
calculations and/or increase their return on investment targets with respect to online advertising in general, or
TripAdvisor traffic in particular, they might reduce the prices they are willing to pay for our advertising products,
which would have an adverse effect on our business, financial condition and results of operations.
We may experience difficulty in achieving meaningful consumer adoption of, and creating a viable advertising
market via, our applications for smartphone computing devices, which could harm our business.
In general, our content was originally designed for users accessing the Internet on a desktop or laptop
computer. The number of people who access the Internet through devices other than personal computers has
increased substantially in the last few years. Although we have developed services and applications to address the
smaller screens, and less convenient typing capabilities of these devices, the efficacy of the smartphone
advertising market is still developing. Moreover, if our smartphone computing services prove to be less effective
for users seeking to research travel through these devices or less economically attractive for advertisers and the
smartphone segment of Internet traffic grows at the expense of traditional computer and tablet Internet access, we
may experience difficulty attracting and retaining traffic and, in turn, advertisers, on these platforms.
Additionally, as new devices and new platforms are continually being released, it is difficult to predict the
challenges that we may encounter in developing versions of our offerings for use on these alternative devices,
and we may need to devote significant resources to the creation, support, and maintenance of our services on
such devices. To the extent that revenue generated from advertising placed on smartphone computing devices
becomes increasingly more important to our business and we fail to adequately evolve and address this market,
our business and financial performance could be negatively impacted.
We rely on the value of our brand and consumer trust in our brand, and the costs of maintaining and
enhancing brand awareness are increasing.
We invest in our brand in order to retain and expand our customer base and expect these investments to
continue, or even increase, as a result of a variety of factors, including increased spending from competitors, the
increasing costs of supporting multiple brands, expansion into geographies and products where our brands are
less well known, inflation in media pricing, including SEM keywords, and the continued emergence and relative
traffic share growth of search engines and metasearch engines as destination sites for travelers. We expect to
continue to invest in, and devote resources to, advertising and marketing, as well as other brand building efforts
to preserve and enhance consumer awareness of our brands. Such efforts may not maintain or enhance consumer
awareness of our brands, and, even if we are successful in our branding efforts, such efforts may not be cost-
effective, or as efficient as they have been historically. If we are unable to maintain or enhance consumer
awareness of our brands or to generate demand in a cost-effective manner, it would have a material adverse
effect on our business and financial performance.
We face competition from companies and websites that collect travel-related content, which could divert traffic
from our websites causing financial harm to us.
We may face increased competition to the extent that competitors pursue a strategy to maximize the creation
of commercially valuable online content at significant scale. For example, if any of the large search engines,
online travel agencies or other companies chose to compete more directly with us in the travel review space, we
may face loss of business or other adverse financial consequences since those entities generally possess
significantly greater consumer bases, financial resources, distribution channels and patent portfolios. For
example, Google + Local, with its aggregated reviews and local recommendations, competes with us. Further,
Google’s access to more comprehensive data regarding user search queries through its search algorithms gives it
a significant competitive advantage over other companies in the industry, including us. If this data is used
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