TripAdvisor - Rational Decision or?

In February of 2010 Expedia's CEO Dara Khosrowshahi was busy denying the IPO or spin out of Trip Advisor. Oh what a difference a year makes. Announced today after the markets closed on the US East Coast Expedia Inc announced the split of the company into two entities.

it is interesting considering the parentage of Expedia as a Baby Bill spin off from Microsoft. Today Microsoft is struggling having fallen behind both Google and Apple in tech stock value. Perhaps it should split up... but I digress.

One can speculate as to what has been in mind with the future of the Expedia family - but someone needs to get value because the stock is getting its ass kicked by the smaller PCLN.

But what do the analysts say? Well the jury is out. The move has been expected for quite some time so in my view the value of Trip Advisor has already been factored in.

Quoting the first guy to come out and put out a research note on this who is Deutsche Bank's Herman Leung - he is being cautious and maintaining a short term value of $25 and says HOLD. He argues that the bears would have a 9x valuation at the low end to bulls who could go as high as 15X. Pretty broad spread but understandable. I wont steal his thunder.

In my view there is the devil you know and the devil you don't know. I concur with his analysis that TA's yields are better and therefore the multiple for the TA business should be higher than that of the residual transaction based business. It tells me that there is a certain fear that competing with PCLN on a direct basis will actually see Expedia's value drop in an apple to apple comparison. This may have been one reason why EXPE has been holding onto TA for so long.

Now that the company has done quite a few things to shore up their core business to wit:
Partnering in Asia Pac with Air Asia.
Using Cleartrip to power domestic India
Coming to terms with AA
Abandoning the pure GDS based supply model for Air

Now therefore would be a good time to give some opportunity to eke out some better equity value.

For Trip Advisor this is good. Steve and the team will now be free to ply their own wares. one thing to think about will be an Air Search engine. Will they go the me too route with Kayak with ITA or native ITA or will they be bold and go with a Vayant or an Everbread. Even develop their own directly or with a third party group.

The possibilities are broad and this can shake things up in search.

Of course one key question will be how they handle community with positive relationship with Facebook or will they try and challenge the Dentist's son's juggernaut.

Questions indeed

Cheers


With thanks to Strawberry Walrus website.

Is TripAdvisor getting sloppy?

Expedia’s TripAdvisor business has come in for a lot of stick lately. Some of which is deserved. Some of which – well it just goes with the territory. But I am going to chastise them for failing to do something that in my mind should be relatively easy and straightforward and thus provide a good service to their customers. I am speaking here about SeatGuru.com

As a frequent flyer (OK so I am not George Clooney) – I depend on the network of committed flyers for information. So I was actually applauding Expedia’s trip advisor when they purchased one of my favorite tools – seatguru.com.

However of late I have noticed that there has been little upgrading of the core content. Sure there is now a lot more digital junk on the site – I can hardly see the real content for the distracting and in my opinion thoroughly unnecessary “stuff” that surrounds it. In the past month I have flown or booked on G3, FR, New RG, AF, U2, AA, BA, DL and CO. in each case I have seen that the Seatguru seat maps frequently do not match either the aircraft or the airlines website version of the aircraft product. When doing the searches the discrepancy widens with some aircraft types not present etc etc.

In fairness to Seatguru – the plethora of seat configurations within each airline is astounding. The airlines are not good at standardizing their aircraft. However this is no excuse for Expedia’s subsidiary for getting sloppy and lazy and not giving more and better information to its users. At the very least the chaps at Seatguru should be on the ball working with the airlines to get valid seat maps out there. If I can see this then they can figure out how to get better quality and be useful to their audience.

In my most recent round of searches here are the statistics:

Total flight segments actually booked – 27 (9 plus 1 where I had to change and throw away a segment, 17 segments that I have to do before the end of the year). Total flight seat maps researched 58. Total mismatch in searches between airline seat maps and Seatguru – 24 (note this included absence of seat maps – 11. . Total mismatch between flights selected and actual aircraft configuration seats 8. Note I didn’t check on the airlines seat maps to actual configuration but I recall just one in which case it was a substituted equipment and I was upgraded (thank you Delta). As you can see these stats are not good.

Mind you I am not a normal flyer…. But these are representative of the airlines that I fly and I am sure that there are many other frustrated FFs out there who share the same opinion. Get with the Program Expedia. If not there will be a lot of people moving to other websites. And yes Virginia there are others. Like ExpertFlyer or seatplans.

Cheers

Flogging now illegal in Europe

Commercial Blogging become illegal on Monday night in Europe. Those pesky people who wax lyrically and effuse wondrous statements about hotel sites and restaurants will now face the ire of the European Commission.

Not quite sure how it will get enforced but... oh well you have now been warned.

So ANYONE doing this is committing an illegal act.

This practice has some wonderful names:

Flogging
Astroturfing
CoBlo

So you have been warned hoteliers.

Does this mean that we will be clear of content that is not commercial in blogs. Far from it. But anyway... lets hope Tripadvisor and its ilk clean up their act(s) accordingly.

Cheers

Timothy