TripAdvisor 2013 Annual Report Download - page 30

• In addition, we compete with newspapers, magazines and other traditional media companies that
provide offline and online advertising opportunities.
• For our vacation rental business, we also face competition from several companies, including
HomeAway and Airbnb, some of whom have a larger inventory of rooms available than we do.
Many of our competitors have significantly greater financial, technical, marketing and other resources
compared to us and have expertise in developing online commerce and facilitating Internet traffic as well as large
client bases. We expect to face additional competition as other established and emerging companies enter the
travel advertising market.
Certain of the companies we do business with, including some of our click-based advertising partners, are
also our competitors. The consolidation of our competitors and partners, including Expedia (through its
investment in Trivago) and Priceline (through its acquisition of Kayak), may affect our relative competitiveness
and our partner relationships. Competition and consolidation could result in higher traffic acquisition costs,
reduced margins on our advertising services, loss of market share, reduced customer traffic to our websites and
reduced advertising by travel companies on our websites. For example, Google (through its launch of Google
Hotel Finder, evolution and expansion of Google + Local and preferred top placement of Places results in Google
organic travel search results) and Microsoft’s Bing (through its launch of Bing Travel), have each taken steps to
appeal more directly to travel customers, which could lead to diversion of customer traffic to their own websites
or those of a favored partner, or undermine our ability to obtain prominent placement in paid or unpaid search
results at a reasonable cost, or at all. Competition in our industry may result in pricing pressure, loss of market
share or decreased member engagement, any of which could adversely affect our business and financial
performance.
As a distributor and host of Internet content, we face potential liability and expense for legal claims based on
the nature and content of the materials that we distribute or create, or that are accessible via our websites.
As a distributor and host of original content and user-generated content, we face potential liability based on
a variety of theories, including defamation, libel, negligence, copyright or trademark infringement or other legal
theories based on the nature, creation or distribution of this information, and under various laws, including the
Lanham Act, the Copyright Act, the Federal Trade Commission Act, and the Digital Millennium Copyright Act.
We may also be exposed to similar liability in connection with content that users post to our websites through
forums, blogs, comments, and other social media features. In addition, it is possible that visitors to our websites
could make claims against us for losses incurred in reliance upon information provided via our websites. These
claims, whether brought in the United States or abroad, could divert management time and attention away from
our business and result in significant costs to investigate and defend, regardless of the merit of these claims. If we
become subject to these or similar claims and are not successful in our defense, we may be forced to pay
substantial damages. There is no guarantee that we will avoid future liability and potential expenses for legal
claims based on the content available on our websites. Should the content distributed through our websites
violate the rights of others or otherwise give rise to claims against us, we could be subject to substantial liability,
which could have a negative impact on our business and financial performance.
Loss of trust in our brand would harm our reputation and adversely affect our business, financial condition
and results of operations. Our success depends on attracting a large number of users to our websites, and
retaining such users, and providing leads and clicks to advertisers. In order to attract and retain users, we must
remain a valuable source of travel advice. Because of our reliance on user-generated content, we must
continually manage and monitor our content and detect incorrect or fraudulent information. For example, hotels,
hotel competitors, or others, in an attempt to improperly influence a hotel’s reviews and rankings, sometimes
write and submit fraudulent or otherwise misleading reviews. If a significant amount of inaccurate or fraudulent
information were not detected and removed by us in a timely manner, or if a significant amount of information
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