TripAdvisor 2015 Annual Report Download - page 12

Wehaveconsidered,andwillcontinuetoconsider,theappropriatenessoffilingforpatentstoprotectfutureinventions,ascircumstancesmaywarrant.
However,manypatentsprotectonlyspecificinventionsandtherecanbenoassurancethatothersmaynotcreatenewproductsormethodsthatachievesimilar
resultswithoutinfringinguponpatentsownedbyus.
Government Regulation
WearesubjecttoanumberofUnitedStatesfederalandstateandforeignlawsandregulationsthataffectcompaniesconductingbusinessontheInternet,
manyofwhicharestillevolvingandbeingtestedincourts,andcouldbeinterpretedinwaysthatcouldharmourbusiness.Thesemayinvolveuserprivacy,libel,
rightsofpublicity,dataprotection,content,intellectualproperty,distribution,electroniccontractsandothercommunications,competition,protectionofminors,
consumerprotection,taxationandonlinepaymentservices.Inparticular,wearesubjecttoUnitedStatesfederalandstateandforeignlawsregardingprivacyand
protectionofuserdata.Foreigndataprotection,privacy,andotherlawsandregulationsareoftenmorerestrictivethanthoseintheUnitedStates.UnitedStates
federalandstateandforeignlawsandregulationsareconstantlyevolvingandcanbesubjecttosignificantchange.Inaddition,theapplicationandinterpretationof
theselawsandregulationsisoftenuncertain,particularlyinthenewandrapidly-evolvingindustryinwhichweoperate.Therearealsoanumberoflegislative
proposalspendingbeforetheUnitedStatesCongress,variousstatelegislativebodies,andforeigngovernmentsconcerningdataprotectionwhichcouldaffectus.
Inaddition,weprovideadvertisingdataandinformationandconductmarketingactivitiesthataresubjecttoUnitedStatesfederalandstateconsumer
protectionlawsthatregulateunfairanddeceptivepractices,domesticallyandinternationally.TheUnitedStatesandEuropeanUnionhavebeguntoadopt
legislationthatregulatescertainaspectsoftheInternet,includingonlineeditorialanduser-generatedcontent,userprivacy,behavioraltargetingandonline
advertising,taxation,andliabilityforthird-partyactivities.
UnitedStatesfederal,stateandforeigngovernmentshaveconsideredfromtimetotimealternativelegislativeandregulatoryproposalsthatwouldincrease
regulationonInternetadvertising.Itisimpossibletoaccuratelypredictwhethernewtaxesorregulationswillbeimposedonourservices,andwhetherorhowwe
mightbeaffected.IncreasedregulationoftheInternetcouldincreasethecostofdoingbusinessorotherwisemateriallyadverselyaffectourbusiness,financial
conditionoroperationalresults.
Wearesubjecttolawsthatrequireprotectionofuserprivacyanduserdata.Inourprocessingofreservations,wereceiveandstorealargevolumeof
personallyidentifiabledataintheUnitedStates,EuropeandAsia.Thisdataisincreasinglysubjecttolawsandregulationsinnumerousjurisdictionsaroundthe
world,includingtheCommissionoftheEuropeanUnionthroughitsDataProtectionDirectiveandvariationsandimplementationsofthatdirectiveinthemember
statesoftheEuropeanUnion.Suchgovernmentactionistypicallyintendedtoprotecttheprivacyofpersonaldatathatiscollected,processedandtransmittedinor
fromthegoverningjurisdiction.
Our Reportable Segments
Wehavetworeportablesegments:HotelandOther.OurOthersegmentconsistsofthreeoperatingsegments:ourAttractions,RestaurantsandVacation
Rentalsbusinesses.Ouroperatingsegmentsaredeterminedbasedonhowourchiefoperatingdecisionmakermanagesourbusiness,regularlyassessesinformation
andevaluatesperformanceforoperatingdecision-makingpurposes,includingallocationofresources.ThechiefoperatingdecisionmakerfortheCompanyisour
ChiefExecutiveOfficer.
Hotel Segment
OurHotelsegmentaccountedfor85%ofourCompany’sconsolidatedrevenuein2015andincludesrevenuegeneratedfromservicesrelatedtohotels,
includingclick-basedanddisplay-basedadvertisingrevenuefrommakinghotelroomnightsavailableforpricecomparisonandbooking,includingourinstant
bookingfeature,aswellassubscription-basedhotelproductssuchasBusinessListings,transaction-basedhotelproductssuchasJetsetterandTingo,andother
revenuerelatedtohotels.OurHotelsegmentalsoincludesadvertisingrevenuefrommakingairlinereservationsandcruisereservationsavailableforprice
comparisonandbooking.
TheHotelsegment’sfinancialperformanceisprincipallydependentonourabilitytogrowclick-basedadvertisingrevenue.Thisrevenuestreamishighly
dependentupongrowthinourhotelshoppers,howeffectivelyweconverthotelshoppersintorevenue,andthepricewegetpaidperhotelshopper,allofwhich
equatestorevenueperhotelshopper.Weusetheterm“hotelshoppers”torefertovisitorswhovieweitheralistingofhotelsinacityoraspecifichotelpage.
AsignificantpercentageofourannualuniqueusersarenothotelshoppersandvisitTripAdvisorsiteswithoutnavigatingtopagesthatcontainalistingof
hotelsinacityoraspecifichotel’spage.RevenuegeneratedfromtheseusersisreflectedinourOthersegmentbelow.
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