Expedia 2007 Annual Report Download - page 17

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Section 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after
they have been electronically filed with, or furnished to, the SEC.
Code of Ethics. We post our code of business conduct and ethics, which applies to all employees,
including all executive officers, senior financial officers and directors, on our corporate website at
www.expediainc.com. Our code of business conduct and ethics complies with Item 406 of SEC Regulation S-K
and the rules of the NASDAQ. We intend to disclose any changes to the code that affect the provisions
required by Item 406 of Regulation S-K, and any waivers of the code of ethics for our executive officers,
senior financial officers or directors, on our corporate website.
Employees
As of December 31, 2007, we employed approximately 7,150 full-time and part-time employees,
including approximately 1,690 employees of eLong. We believe we have good relationships with our
employees, including relationships with employees represented by works councils or other similar
organizations.
Part I. Item 1A. Risk Factors
You should carefully consider each of the following risks and uncertainties associated with our company
and the ownership of our securities. Additional risks not presently known to us or that we currently deem
immaterial may also impair our business operations.
We operate in an increasingly competitive global environment.
The market for the services we offer is increasingly and intensely competitive. We compete with both
established and emerging online and traditional sellers of travel services with respect to each of the services
we offer. Some of our competitors, particularly travel suppliers such as airlines and hotels, may offer products
and services on more favorable terms, including lower prices, no fees or unique access to proprietary loyalty
programs, such as points and miles. Many of these competitors, such as airlines, hotel and rental car
companies, have been steadily focusing on increasing online demand on their own websites in lieu of third-
party distributors such as Expedia. For instance, some low cost airlines, which are having increasing success in
the marketplace, distribute their online inventory exclusively through their own websites. Suppliers who sell on
their own websites typically do not charge a processing fee, and, in some instances, offer advantages such as
increased or exclusive product availability and their own bonus miles or loyalty points, which could make their
offerings more attractive to consumers than offerings like ours. In addition, we face increasing competition
from other travel agencies, which in some cases may have favorable offerings for both travelers and suppliers,
including pricing, connectivity and supply breadth. We also compete with other travel agencies for both
travelers and the acquisition and retention of supply. The introduction of new technologies and the expansion
of existing technologies, such as metasearch and other search engine technologies, may increase competitive
pressures or lead to changes in our business model. Increased competition has resulted in and may continue to
result in reduced margins, as well as loss of travelers, transactions and brand recognition. We cannot assure
you that we will be able to compete successfully against current, emerging and future competitors or provide
differentiated products and services to our traveler base.
Our business depends on our relationships with travel suppliers.
An important component of our business success depends on our ability to maintain and expand
relationships with travel suppliers and GDS partners. Adverse changes in existing relationships, or our inability
to enter into new arrangements with these parties on favorable terms, if at all, could reduce the amount,
quality and breadth of attractively priced travel products and services that we are able to offer, which could
adversely affect our business and financial performance.
Travel suppliers are increasingly seeking to lower their travel distribution costs by promoting direct online
bookings through their own websites. In some cases, supplier direct channels offer advantages to consumers,
such as “best rate guarantees,” loyalty programs and/or lower transaction fees. In addition, travel suppliers
may choose not to make their travel products and services available through our distribution channels. To the
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