Expedia 2012 Annual Report Download - page 64
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Direct costs include online marketing expenses with TripAdvisor of $205 million in 2012, $211 million in
2011 and $171 million in 2010. Prior to the spin-off, these amounts were eliminated but are now included in
selling and marketing expense.
Technology and Content
Year ended December 31, % Change
2012 2011 2010 2012 vs 2011 2011 vs 2010
($ in millions)
Personnel and overhead 263 $ 200 $ 157 31% 28%
Depreciation and amortization of technology assets 116 84 66 38% 26%
Other 106 97 86 10% 13%
Total technology and content $ 485 $ 381 $ 309 27% 23%
% of revenue 12.0% 11.0% 10.2%
Technology and content expense includes product development and content expense, as well as information
technology costs to support our infrastructure, back-office applications and overall monitoring and security of
our networks, and is principally comprised of personnel and overhead, depreciation and amortization of
technology assets including hardware, and purchased and internally developed software, and other costs
including licensing and maintenance expense and stock-based compensation.
The year-over-year increase in technology and content expense of $104 million in 2012 and $72 million in
2011 was primarily due to higher personnel costs for additional headcount to support key technology project for
our corporate technology function, Brand Expedia and supply organization as well as increased depreciation and
amortization of technology assets.
General and Administrative
Year ended December 31, % Change
2012 2011 2010 2012 vs 2011 2011 vs 2010
($ in millions)
Personnel and overhead $219 $183 $150 20% 22%
Professional fees and other 126 127 109 0% 16%
Total general and administrative $345 $310 $259 12% 20%
% of revenue 8.6% 9.0% 8.5%
General and administrative expense consists primarily of personnel-related costs, including our executive
leadership, finance, legal and human resource functions as well as fees for external professional services
including legal, tax and accounting, and other costs including stock-based compensation.
In 2012, the $35 million increase in general and administrative expense was primarily due to higher
personnel expenses, including bonus accruals and additional headcount, and higher legal fees, partially offset by
lower consulting fees.
In 2011, the increase in general and administrative expense was primarily due to higher personnel expenses
resulting from an increase in headcount, an increase in stock-based compensation expense due to the
modification of awards as a result of the spin-off as well as an increase in consulting fees. During 2011, our
general and administrative expenses included expenses, such as bonuses and consulting fees, related to both the
turnaround of Brand Expedia and realignment of our supply organization that accelerated the increase in expense.
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