Expedia 2009 Annual Report Download - page 14

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Fulfillment Partners. We outsource a portion of our airline ticket fulfillment functions to third-party
suppliers. Such functions include the issuance of airline tickets and related customer services.
Marketing and Promotions
Our marketing programs are intended to build and maintain the value of our various brands, drive traffic and
conversion through our various brands and businesses, optimize ongoing traveler acquisition costs and
strategically position our brands in relation to one another. Our long-term success and profitability depends on
our continued ability to maintain and increase the overall number of traveler transactions in a cost-effective
manner.
Our marketing channels primarily include online advertising including search engine marketing and
optimization, offline advertising, direct and/or personalized traveler communications on our websites as well as
through direct e-mail communication with our travelers. Our marketing programs and initiatives include
promotional offers such as coupons as well as seasonal or periodic special offers from our travel suppliers based
on our supplier relationships. In addition, we offer several traveler loyalty programs to our worldwide travelers,
including the ThankYou Rewards on Expedia.com, welcomerewards on hotels.com and Nectar in the United
Kingdom.
We also make use of affiliate marketing. The Expedia.com and hotels.com-branded websites receive
bookings from consumers who have clicked-through to the respective websites through links posted on affiliate
partner websites. We have agreements with thousands of third-party affiliate partners, including a number of
leading travel companies, pursuant to which we pay a commission for bookings originated from their websites.
Affiliate partners can make travel products and services available through an Expedia-branded website, a
co-branded website or their own private label website. We also provide our affiliates with technology and access
to a wide range of products and services.
Operations and Technology
We provide 24-hour-a-day, seven-day-a-week traveler support by telephone or via e-mail. For purposes of
operational flexibility, we provide this support infrastructure with a combination of outsourced and in-house call
centers, which are located in various locations throughout the world, including extensive outsourced operations
in the Philippines and El Salvador. We have made significant investments in our call center technologies in 2008
and 2009 and have plans to continue these investments going forward.
Our systems infrastructure and web and database servers are housed in various locations, mainly in the
United States, which have communication links as well as 24-hour monitoring and engineering support. The web
hosting facilities have their own generators and multiple back-up systems. Significant amounts of our owned
computer hardware for operating the websites are located at these facilities. For some critical systems, we have
both production and disaster-recovery facilities.
We have developed innovative technology to power our global travel marketplace. For example, our Best
Fare Search technology essentially deconstructs segment feeds in the United States from GDS partners for air
flight searches and recommends the best way to re-assemble multi-leg itineraries so that they are less expensive
and more flexible for the traveler. We are looking to expand this technology internationally. We are also
investing in improving our fare discovery technologies and user interfaces to provide more comprehensive and
easier discovery of competitive rates for our travelers.
We continue to invest in our operations and technology infrastructure, and we anticipate additional traveler-
facing benefits in 2010.
Competition
Our brands compete in rapidly evolving and intensely competitive markets. We believe the relatively low
percentage of total travel sales transacted online, particularly in international markets, indicates that these
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