Expedia 2006 Annual Report Download - page 11

Download and view the complete annual report

Please find page 11 of the 2006 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 112

  • 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
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

Business Strategy
Expedia, Inc. is building the world’s largest and most intelligent travel marketplace. We play a
fundamental role in facilitating travel, whether for leisure or business. We are committed to providing our
travelers with the best set of resources to serve their travel needs by taking advantage of our critical assets —
our brand portfolio, our technologies and continuous innovation, our global reach, and our breadth of product
offering. In doing so, we take advantage of our growing base of knowledge about our destinations, suppliers
and travelers based on our unique position in the travel value chain.
A discussion of the critical assets that we leverage in achieving our business strategy follows:
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 bookings 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 destinations.
We believe our appeal to suppliers is enhanced by our brand portfolio and our international points of sale,
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.
Technologies and Continuous Innovation. Expedia has an established tradition of innovation, from
Expedia.com’s inception as a division of Microsoft, to our introduction of more recent innovations such as our
ThankYou Rewards Network offered in conjunction with Citigroup, Expedia»Fare Alerts, Travel Ticker
TM
by
Hotwire», TripAdvisor’s wikis and ECT’s business intelligence toolset.
We intend to continue to aggressively innovate on behalf of our travelers, including our current efforts in
building a scaleable, extensible, service-oriented technology platform, which will extend across our portfolio
of brands. We expect this to result in improved flexibility and faster go-forward innovation. This transition
should 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 portions of our
worldwide points of sale migrating to the new platform beginning in 2007.
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 extranet. Our travelers
can book reservations with over 30,000 worldwide merchant hotel properties, of which over 35% are now fully
direct-connected. We are planning to offer more streamlined application programming interfaces for our
lodging partners in 2007, to enable faster and simpler integration of real-time hotel content.
We are also improving our data handling capabilities across Expedia with the installation of an enterprise
data warehouse, which will allow enhanced personalization on both our websites and e-mail communications
with our travelers. The project is scheduled to begin yielding benefits to our travelers beginning in 2007.
Global Reach. In 2006, our international gross bookings accounted for approximately 26% of worldwide
gross bookings and 28% of revenue. We currently operate over 50 branded points of sale across the globe,
including Expedia-branded sites in the United States, Australia, Canada, Denmark, France, Germany, Italy,
Japan, the Netherlands, Norway, Sweden and the United Kingdom. Our Hotels.com and TripAdvisor brands
5