Expedia 2010 Annual Report Download - page 9

We intend to continue innovating on behalf of our travelers, suppliers and advertisers with particular focus
on improving the traveler experience, supplier integration and presentation, platform improvements, search
engine marketing and search engine optimization.
Global Reach. Our Expedia, Hotels.com and TripAdvisor Media Network brands operate both in North
America and internationally. We also offer Chinese travelers an array of products and services through our
majority ownership in eLong and through our TripAdvisor brands daodao.com and kuxun.cn, and we offer hotels
to European-based travelers through Venere. In 2010, approximately 36% of our worldwide gross bookings and
38% of worldwide revenue were international.
Egencia, our corporate travel business, operates in North America, Europe, the Middle East, Africa and the
Asia Pacific region using direct points of sale as well as strategic partnerships. We believe the corporate travel
sector represents a significant opportunity for Expedia, and we believe we offer a compelling technology solution
to businesses seeking to optimize travel costs and improve their employees’ travel experiences. We intend to
continue investing in and expanding the geographic footprint and technology infrastructure of Egencia.
In expanding our global reach, we leverage significant investments in technology, operations, brand
building, supplier relationships and other initiatives that we have made since the launch of Expedia.com in 1996.
We intend to continue leveraging this investment when launching additional points of sale in new countries,
introducing new website features, adding supplier products and services including new business model offerings,
as well as proprietary and user-generated content for travelers.
Our scale of operations enhances the value of technology innovations we introduce on behalf of our
travelers and suppliers. As an example, our traveler review feature — whereby our travelers have created
millions of qualified reviews of hotel properties — is able to accumulate a larger base of reviews due to the
higher base of online traffic that frequents our various websites. In addition, our increasing scale enhances our
websites’ appeal to travel and non-travel advertisers.
We intend to continue investing in and growing our international points of sale. We anticipate launching
points of sale in additional countries where we find large travel markets and rapid growth of online commerce.
Future launches may occur under any of our brands, or through acquisition of third-party brands, as in the case of
Egencia, eLong, Kuxun and Venere.
Breadth of Product Offering. We offer a comprehensive array of innovative travel products and services to
our travelers. We plan to continue improving and growing these offerings, as well as expand them to our
worldwide points of sale over time. Travelers can interact with us how and when they prefer, including via our
24/7 1-800 telesales service, which is an integral part of the Company’s appeal to travelers. We offer travelers
access to over 130,000 hotels and over 300 airlines in over 200 countries around the world.
Over 60% of our revenue comes from transactions involving the booking of hotel reservations, with less
than 15% of our worldwide revenue derived from the sale of airline tickets. We facilitate travel products and
services either as stand-alone products or as part of package transactions. We have emphasized growing our
merchant hotel and package businesses as these result in higher revenue per transaction; however, we are
working to grow our global agency hotel business through our Venere, Expedia and Hotels.com brands. 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. We have been working toward and will continue to work toward
increasing the mix of advertising and media revenue from both the expansion of our TripAdvisor Media
Network, as well as increased advertising revenue from our worldwide websites, such as Expedia.com and
Hotels.com, which have historically been focused on transaction revenue. In 2010, advertising and media
revenue accounted for approximately 13% of worldwide revenue.
Merchant and Agency Business Models
We make travel products and services available both on a stand-alone and package basis, primarily through
two business models: the merchant model and the agency model. Under the merchant model, we facilitate the
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