TripAdvisor 2014 Annual Report Download - page 24

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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 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 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 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:
x We 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.
x We 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.
x 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.
x 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.
x In addition, we compete with newspapers, magazines and other traditional media companies that provide offline and
online advertising opportunities.
x 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.
x For our restaurant reservation and attractions business, the competition is not as consolidated as it is for other areas of our
business; however, we face competition from certain companies like OpenTable in the United States.
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.