TripAdvisor 2015 Annual Report Download - page 17

We operate in an increasingly competitive global environment and our failure to compete effectively could reduce our market share and harm our financial
performance.
Wefacecompetitionforcontent,users,advertisers,onlinetravelsearchandpricecomparisonservices(orhotelmetasearch)andonlinereservations.We
alsofacecompetitionfromlargecompaniesthatalsooffercomprehensiveon-lineresourcesfordestinations,lodging,attractionsandrestaurants.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:
·Forcontent,wefacecompetitionfromlargeonlineportals,socialnetworkingsitesandsearchengines,suchasGoogle,Facebook,YahooandBaidu,
whichcompetitionwillonlyincreaseshouldtheychoose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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.
·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.Majorhotelcompaniesmayalsoattempttoimprovetheircompetitivepositionbyofferinglowerroomrates,
betterroomavailabilityoradditionalfeaturesoramenitiesthroughtheirreservationservicethanareavailablethroughserviceslikeours.
·Wealsofacecompetitionfromwholesalers,touroperators,traditionalofflinetravelagenciesandoperatorsoftravelindustryreservationdatabases
suchasGalileo,Travelport,AmadeusandSabre.
·Inaddition,wecompetewithnewspapers,magazinesandothertraditionalmediacompaniesthatprovideofflineandonlineadvertisingopportunities.
·Inourvacationrentalbusiness,wefacecompetitionfromseveralcompanies,includingHomeAway(asubsidiaryofExpedia)andAirbnb,Inc.,some
ofwhomhavealargerinventoryofroomsavailable.
·Inourrestaurantreservationandattractionsbusiness,wefacecompetitionfromcertaincompanieslikeOpenTable(asubsidiaryofPriceline),
SeatMe(whichisownedbyYelp)andTable8(whichwasrecentlylaunchedbyAmazon)aswellasotherregionalplayersoperatinginvariousparts
oftheworld.
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acquisitionsofTrivago,Orbitz,Travelocity,andHomeAway)andPriceline(throughitsacquisitionsof
KayakandOpenTable),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has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.
We are regularly subject to claims, suits, government investigations, and other proceedings that may result in adverse outcomes.
Weareregularlysubjecttoclaims,suits,governmentinvestigationsandotherproceedingsinvolvingcompetition,intellectualproperty,privacyanddata
protection,consumerprotection,tax,laborandemployment,commercialdisputes,contentgeneratedbyourusers,freespeechissues,goodsandservicesofferedby
advertisersorpublishersusingourplatforms,andothermatters.Inaddition,ourbusinessesfaceintellectualpropertylitigationthatexposesustotheriskof
exclusionandceaseanddesistorders,whichcouldlimitourabilitytosellproductsandservices.

14