TripAdvisor 2012 Annual Report Download - page 5

•Diversify traffic sources. We strive to have travelers start their travel research at TripAdvisor, but
domain direct traffic remains a stubbornly low percentage of our traffic given our scale and global
reach. In 2013, we are embarking on a global TV advertising campaign as a means of amplifying our
brand message and accelerating traffic growth.
•More acquisitions. The year 2012 was relatively quiet on the acquisition front, as we made only one
small purchase of a social and personalization travel company, Wanderfly. However, so far in 2013, we
have added some wonderfully talented teams to TripAdvisor family. We enhanced our mobile effort
through the acquisition of a mobile postcard company, TinyPost; bolstered our hotel private sale
business through our acquisition of the leading travel flash sale site, Jetsetter; added the talented team
from cruise research and planning site, CruiseWise, to our existing cruise business; and diversified our
vacation rentals business by purchasing a leading Spanish rental site, Niumba. Consistent with our past
transactions, all these acquisitions are tuck-ins that fit nicely with our strategic roadmap bringing a
unique traveler value proposition bring.
We continue to actively look for great ideas, teams and opportunities to accelerate our product roadmap
and to enhance our global competitive positioning. Given our growing cash balance both domestically
and abroad, we continue to seek out great traveler-focused businesses that can accelerate our penetration
into target geographies, help expand our product set, or add to our engineering talent.
Our business of helping travelers plan and have the perfect trip. Our financials grew at a healthy pace in
2012. Total revenue increased 20% year over year, to $763 million. We also delivered a healthy bottom line, with
Adjusted EBITDA of $352 million, a 46% margin.
We continue to prioritize revenue growth over profitability and profit margins, given the huge opportunity in the
rapidly growing online travel market. Travelers continue to migrate online to conduct travel research and
planning, and with growing middle classes in newer Asia-Pacific and Latin American markets, we will explore
new ways to amplify our brand on an international scale to bring more of these travelers to our site. We believe
we have engaged just a fraction of the global travel market online, and we remain firmly within an investment
cycle focused on capturing worldwide market share.
What’s next. Three main considerations guide every one of our important strategic decisions: is it good for the
user experience; is it good for our customers; and what does it do for TripAdvisor’s financials and,
correspondingly, long-term shareholder value? Once we weigh those factors and come to a decision, we act fast.
To that end, following our metasearch rollout to all smartphone traffic in the fourth quarter of 2012, we started
integrating similar capabilities to all TripAdvisor desktop and tablet traffic, a significant project that we expect to
complete sometime in the middle of 2013. For our users, this means a more enjoyable, informative, and
frictionless TripAdvisor experience on all devices. For our partners, this will drive better converting leads from
TripAdvisor. From a monetization standpoint, we expect to see short-term revenue disruption from this shift but
we are excited by what this major user experience upgrade could mean for our competitive positioning and long-
term financial prospects. We actively seek ways to improve our product and will not hesitate when we think we
have found something that will prove useful to travelers.
In light of our new price shopping value proposition, we plan to kick off a global offline marketing campaign,
which will showcase TripAdvisor’s value and help build a more far-reaching, indispensible travel brand. We will
approach this offline campaign with the same iterative, test-and-learn process as we do with our other major
initiatives, as we look to measure and quantify the results in each market.