Expedia 2005 Annual Report Download - page 12

Business Strategy
We are in the early stages of leveraging our historic strength as an efficient transaction processor to
become a retailer and merchandiser of travel experiences. Our goal is to help travelers enjoy their trips;
from before the reservation is made, to after the trip has been taken.
Our business strategy is as follows:
‚ Leverage our portfolio of travel brands;
‚ Innovate on behalf of travelers and supplier partners;
‚ Expand our international and corporate travel businesses;
‚ Expand our product and service offerings worldwide; and
‚ Leverage our scale in technology and operations.
Leverage Our Portfolio of Travel Brands. We seek to appeal to the broadest possible range of
travelers and suppliers through our collection of industry-leading brands. We target several different
demographics, from the value-conscious traveler through our Hotwire brand to luxury travelers seeking a
high-touch, customized vacation package through our Classic Vacations brand. We believe our flagship
Expedia brand appeals to the broadest range of travelers, with our extensive product offering and
facilitation of single item purchases of discounted product to complex bundling of higher-end travel
packages. Our Hotels.com site and its international versions target travelers with premium content about
lodging properties, and generally appeal to travelers with shorter booking windows who prefer to drive to
their destination.
We believe our appeal to suppliers is enhanced by our brand portfolio and our international points of
presence, by allowing suppliers to access the broadest possible range of travelers with their product and
service offerings. We intend to continue supporting and investing in our brand portfolio for the benefit of
travelers and suppliers.
Innovate on Behalf of Travelers and Supplier Partners. We have a long tradition of innovation, from
Expedia.com's inception as a division of Microsoft, to our introduction of Best Fare Search and dynamic
packaging technologies to more recent innovations such as traveler reviews, Personal Trip Guides, Expedia
Corporate Travel's TripController software and our AirShopper e-mail campaign.
A recent innovation of note was Expedia.com's introduction of its Best Price Guarantee in early 2006.
We increase our travelers' confidence and their likelihood of purchase by assuring them that our pricing is
competitive. If travelers find a better price online for the same trip within 24 hours, we refund the
difference and we give them a $50 travel coupon towards their next qualifying trip, subject to certain
restrictions.
We intend to continue innovating on behalf of our travelers. We are currently investing in and
building a scaleable, extensible, service-oriented technology platform, which will extend across our portfolio
of brands. This will result in improved flexibility and faster go-forward innovation. This transition will
allow us to improve our site merchandising, browse and search functionality and add significant
personalization features. We expect this transition to occur in a phased approach, with worldwide points of
sale migrating to the new platform by early 2008.
We also intend to continue innovating on behalf of our suppliers. As an example, we have developed
proprietary, supplier-oriented technology that streamlines the interaction between some of our websites and
hotel central reservation systems, making it easier and more cost-effective for hotels to manage
reservations made through our brands. Through this ""direct connect'' technology, hotels can upload
information about available products and services and rates directly from their central reservation systems
into our websites, as well as automatically confirm hotel reservations made by our travelers. In the absence
of direct connect technology, both of these processes are generally completed manually via a proprietary
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