TripAdvisor 2013 Annual Report Download - page 32

could also make it easier for competition to enter our markets due to lower up-front technology costs. In addition,
we may not be able to maintain our existing systems or replace or introduce new technologies and systems as
quickly as we would like or in a cost-effective manner.
If we do not continue to innovate and provide tools and services that are useful to travelers, we may not
remain competitive, and our business and financial performance could suffer.
Our success depends in part on continued innovation to provide features and services that make our websites
and smartphone and tablet computing applications useful for travelers. Our competitors are continually
developing innovations in online travel-related services and features. As a result, we are continually working to
improve our business model and user experience in order to drive user traffic and conversion dates. We can give
no assurances that the changes we make will yield the benefits we expect and will not have adverse impacts that
we did not anticipate. If we are unable to continue offering innovative products and services and quality features
that travelers want to use, existing users may become dissatisfied and use a competitor’s offerings and we may be
unable to attract additional users, which could adversely affect our business and financial performance.
New technologies could block our ads, which would harm our business.
Technologies have been developed that can block the display of online ads and that provide tools to users to
opt out of some web-based advertising products. We derive most of our revenues from fees paid to us by
advertisers in connection with the display of ads on web pages for our users. As a result, these technologies and
tools could adversely affect our business and financial performance.
Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results.
We have a culture that encourages rapid development and release of new and improved products, which
may at times result in unintended consequences or decisions that are poorly received by users or advertisers. Our
culture also prioritizes user engagement, or website “stickiness,” over short-term financial results. We have taken
actions in the past and may continue to make product decisions going forward that have the effect of reducing our
short-term revenue or profitability if we believe that the decisions benefit the aggregate user experience and/or
conversion rates and CPC pricing, and will thereby improve our financial performance over the long-term. The
short-term reductions in revenue or profitability could be more severe than we anticipate. These decisions may
not produce the long-term benefits that we expect, in which case our user growth and engagement, our
relationships with users and advertisers, and our business and results of operations could be harmed.
The online vacation rental market is rapidly evolving and if we fail to predict the manner in which the market
develops, our business and prospects may suffer.
We offer vacation rental services through our U.S.-based FlipKey and European-based Holiday Lettings and
Niumba businesses, as well through various partnerships. The online vacation rental market is relatively new and
rapidly evolving in many respects, including acceptance of the business model by travelers, property owners and
property managers; from a business and marketing perspective as well as the regulatory environment. We operate in
various disparate jurisdictions and markets and have limited insight into trends that may develop in those markets
and may affect our business. Since we began offering such services, there have been and continue to be significant
business, marketing and regulatory developments. Operating in new and untested jurisdictions requires significant
management attention and financial resources. We cannot assure that our expansion efforts will be successful, and
the investment and additional resources required to establish operations and manage growth may not produce the
desired levels of revenue or profitability.
If we fail to attract and maintain a critical mass of vacation rental listings and travelers, our vacation rental
marketplaces will become less valuable and this may have a negative impact on our business.
In our vacation rental business, revenue is generated when either owners or managers of vacation rental
properties pay us fees to list and market vacation rental properties to users who visit the websites comprising our
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