Expedia 2005 Annual Report Download - page 36

Download and view the complete annual report

Please find page 36 of the 2005 Expedia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 98

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98

customized vacation package through our Classic Vacations brand. We believe our flagship Expedia brand
appeals to the broadest range of travelers, with its 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.
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, Best
Price Guarantee, Expedia Corporate Travel's TripController software and our AirShopper e-mail
campaign.
We will continue to aggressively innovate on behalf of our travelers and suppliers. As an example, for
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 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. For our suppliers, we have developed proprietary, supplier-oriented technology that streamlines
the interaction between some of our websites and hotel property management systems, making it easier
and more cost-effective for hotels to manage reservations made through our brands.
Expand our international and corporate travel businesses. We currently operate Expedia-branded
sites in the U.S., Canada, U.K., Germany, France, Italy, the Netherlands and Australia. We intend to
continue investing in and growing our existing international points of sale. We anticipate launching
additional countries in the future where we find large travel markets and rapid growth of online commerce.
In addition, we operate sites in the People's Republic of China through eLong, which we acquired in
January 2005.
Expedia Corporate Travel (""ECT'') currently conducts operations in the U.S., Canada, U.K., France,
Belgium, the Netherlands and Luxembourg. We believe the corporate travel sector represents a large
opportunity for Expedia, and we believe we offer a compelling technology solution to small and medium-
sized businesses seeking to control travel costs and improve their employees' travel experiences. Expanding
our corporate travel business also increases our appeal to travel product and service suppliers, as the
average corporate traveler has a higher incidence of first class and international travel than the average
leisure traveler.
Expand our product and service offerings worldwide. In general, through our websites, we offer the
most comprehensive array of innovation and selection of travel products and services to travelers. We plan
to continue improving and growing these offerings, as well as expanding them to our worldwide points of
sale over time.
Leverage our scale in technology and operations. The travel brands comprising Expedia, Inc. have
invested over $3 billion in technology, operations, brand building, supplier integration and relationships and
other areas since the launch of Expedia.com in 1996. We intend to continue leveraging our substantial
investment when launching new countries, introducing site features, adding supplier products and services
or adding value-added content for travelers. We have been able to launch the Italy and Australia websites
relatively quickly and inexpensively by leveraging our existing technology and product supply.
For additional information about our brands, see the disclosure set forth under the caption
""Description of Business.''
Seasonality
We generally experience seasonal fluctuations in the demand for our travel products and services. For
example, traditional leisure travel bookings are generally the highest in the first three quarters as travelers
plan and book their spring, summer and holiday travel. The number of bookings decreases in the fourth
quarter. Because revenue in the merchant business is generally recognized when the travel takes place
29