Expedia 2015 Annual Report Download - page 20

information or otherwise take actions that would increase our operating expenses. Any of actions, or other similar
actions, could reduce our revenue and margins thereby adversely affecting our business and financial
performance.
We rely on the value of our brands, and the costs of maintaining and enhancing our brand awareness
are increasing.
We invest considerable financial and human resources in our brands in order to retain and expand our customer
base. We expect that the cost of maintaining and enhancing our brands will continue to increase due to a variety of
factors, including increased spending from our competitors, promotional and discounting activities, the increasing costs
of our growing customer loyalty programs, the increasing costs of supporting multiple brands and the impact of
competition among our multiple brands, expansion into geographies and products where our brands are less well
known, inflation in media pricing including search engine keywords and the continued emergence and relative travel-
related traffic share growth of search engines and metasearch engines. During 2015, certain online travel companies
and metasearch sites continued to expand their offline and digital advertising campaigns globally, increasing
competition for share of voice, and we expect this activity to continue in the future. We are also pursuing and expect to
continue to pursue long-term growth opportunities, particularly in emerging markets, which have had and may
continue to have a negative impact on our overall marketing efficiency.
Our efforts to preserve and enhance consumer awareness of our brands may not be successful, and, even if
we are successful in our branding efforts, such efforts may not be cost-effective, or as efficient as they have been
historically. Moreover, branding efforts with respect to some brands within the Expedia portfolio have in the past
and may in the future result in marketing inefficiencies and negatively impact growth rates of other brands within
our portfolio. If we are unable to maintain or enhance consumer awareness of our brands and generate demand in
a cost-effective manner, it would have a material adverse effect on our business and financial performance.
We rely on information technology to operate our businesses and maintain our competitiveness, and
any failure to invest in and adapt to technological developments and industry trends could harm our
business.
We depend on the use of sophisticated information technologies and systems, including technology and
systems used for website and mobile applications, reservations, customer service, supplier connectivity,
communications, procurement, payments, fraud detection and administration. As our operations grow in size,
scope and complexity, we must continuously improve and upgrade our systems and infrastructure to offer an
increasing number of travelers enhanced products, services, features and functionality, while maintaining or
improving the reliability and integrity of our systems and infrastructure.
Our future success also depends on our ability to adapt our services and infrastructure to meet rapidly
evolving consumer trends and demands while continuing to improve the performance, features and reliability of
our service in response to competitive service and product offerings. The emergence of alternative platforms such
as smartphone and tablet computing devices and the emergence of niche competitors who may be able to
optimize products, services or strategies for such platforms have, and will continue to, require new and costly
investments in technology. We may not be successful, or we may be less successful than our current or new
competitors, in developing technology that operates effectively across multiple devices and platforms and that is
appealing to consumers, either of which would negatively impact our business and financial performance. New
developments in other areas, such as cloud computing and software as a service provider, could also make it
easier for competition to enter our markets due to lower up-front technology costs. In addition, we may not be
able to maintain our existing systems or replace or introduce new technologies and systems as quickly as we
would like or in a cost-effective manner. We have been engaged in a multi-year effort to migrate key portions of
our consumer, affiliate, and corporate travel sites and back office application functionality to new technology
platforms to enable us to improve conversion, innovate more rapidly, achieve better search engine optimization
and improve our site merchandising and transaction processing capabilities, among other anticipated benefits.
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