Expedia To Spin Off TripAdvisor
Expedia has announced plans to split TripAdvisor into a separate publicly quoted business.
TripAdvisor will take all operations currently associated with the TripAdvisor Media Group. This includes not only the TripAdvisor brand itself, but also 18 other travel brands. This effectively splits all of the media and review based business of the current group into a separate media company.
Expedia will take the company’s travel transaction brands, which include Expedia.com, Hotels.com, eLong, Hotwire, Egencia, Expedia Affiliate Network, CruiseShipCenters, Venere, Classic Vacations and carrentals.com. – all of the online travel agency businesses.
The Expedia announcement says that as part of the deal Expedia investors will receive shares in the new TripAdvisor company.
Fred Moran, an analyst at Benchmark Co. said the move will let Expedia’s shareholders benefit from any growth at TripAdvisor while Expedia fends off increasing pressure from its competitor Priceline.com.
Expedia still has to seek shareholder approval for the split, which is scheduled for completion in the third quarter of 2011. Expedia purchased Trip Advisor in 2004 for $237 million. TripAdvisor makes money from advertising, from paid listings from hotels and from affiliate fees when users book through other OTA sites like Priceline and Orbitz. In 2010 TripAdvisor revenues totaled $486 million.