TripAdvisor 2013 Annual Report Download - page 29

We rely on the value of our brand and consumer trust in our brand. If we are not able to maintain and
enhance our brand, or if events occur that damage our reputation and brand, our business may be harmed.
We believe that the TripAdvisor brand has contributed significantly to our success and that maintaining and
enhancing our brand is critical to expanding our base of users, creating content and attracting advertisers. As a
result, we invest significantly in brand marketing including, most recently, television. We 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, and the continued emergence and relative traffic share
growth of search engines as destination sites for travelers. 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 receive significant media coverage in our various geographic markets. Unfavorable publicity regarding,
for example, our privacy practices, product changes, the accuracy of user-generated content, product quality,
litigation or regulatory activity could adversely affect our reputation with our site users and our advertisers. Such
negative publicity also could have an adverse effect on the size, engagement, and loyalty of our user base and
result in decreased revenue, which could adversely affect our business and financial results.
Intense competition could reduce our market share and harm our financial performance.
The market for the travel services we offer is intensely competitive. We face competition from a number of
different sources and many of our competitors have significantly greater and more diversified resources than we
do and may be able to leverage other aspects of their business to enable them to compete more effectively against
us. More specifically:
• We currently face competition from travel service providers such as major hotel companies, airlines
and rental car companies, many of which have their own websites to which they drive business. For
example, several major hotel companies launched an online hotel reservation service with a stated goal
of driving consumers directly to their brand websites thereby reducing the share receive by online
travel agents. They may also attempt to improve their competitive position by offering lower room
rates, better room availability or additional features or amenities through this reservation service than
are available through services like ours.
• We currently face competition from online travel agents, such as Expedia and Priceline (and their
subsidiaries), and this competition may increase to the extent that these online travel agents accumulate
and develop a comprehensive offering of travel-related reviews and resources. The barriers to entry for
these companies may be limited given their access to travel-related information and relationships with
consumers.
• We face increased competition from the large search engines and social networking sites, companies,
such as Google and Facebook, or other companies, which competition will only increase should they
chose to compete more directly with us in the travel review space, and create commercially valuable
online content at significant scale. For example, Google + Local, with its aggregated reviews and local
recommendations, competes with us and 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. In addition, if significant numbers of users adopt Facebook’s
newly released Graph Search to get travel recommendations, it could have the effect of reducing traffic
and user engagement on TripAdvisor.
• We also face competition from travel agencies, wholesalers and travel operators as well as operators of
travel industry reservation databases such as Galileo, Travelport, Amadeus and Sabre.
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