Expedia 2006 Annual Report Download - page 37

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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.
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 and suppliers, including our
current efforts in building a scaleable, extensible, service-oriented technology platform for our travelers, 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. For
our suppliers, 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. 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.
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
also maintain both U.S. points of sale and additional points of sale outside the United States. Lastly, we offer
Chinese travelers a wide array of products and services through our majority ownership in eLong.
We intend to continue investing in and growing our existing international points of sale, including the
expected launch of an Expedia-branded site in India in 2007. We anticipate launching points of sale in
additional countries where we find large travel markets and rapid growth of online commerce.
ECT currently conducts operations in the United States, Belgium, Canada, France, Germany and the
United Kingdom. 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. We intend to continue investing in and expanding
the geographic footprint of our ECT business.
In expanding our global reach, we are leveraging our significant investment 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 this investment when launching new countries, introducing website features,
adding supplier products and services or adding value-added content for travelers.
Breadth of Product Offering. In general, through our websites, we believe we offer a comprehensive
array of innovative travel products and services to travelers. We plan to continue improving and growing these
offerings, as well as expand them to our worldwide points of sale over time.
The majority of our revenue comes from transactions involving the sale of airline tickets and the booking
of hotel reservations, either as stand-alone products or as part of package transactions. We are working to grow
our package business as it results in higher revenue per transaction, and we also seek to continue diversifying
our revenue mix beyond core air and hotel products to car rental, destination services, cruise and other product
offerings, as well as by increasing the mix of revenue from advertising we derive from our travel partners and
suppliers.
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