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Expedia to spin-off TripAdvisor

The spin-off is expected to take place in Q3 2011

Financial trends and news by Faith Merino
April 8, 2011 | Comments
Short URL: http://vator.tv/n/190f

I never really think about Expedia until they screw me over, like recently, when I booked a hotel room in Fresno (yes, Fresno…) and got there, only to find that no room was ever booked, so I was stranded without a hotel room AND I was down $200.  So Expedia and I haven’t been on good terms lately, but I have to be fair, it could’ve just been a fluke…

But Expedia has bigger things on its mind than whether or not I’m satisfied with their level of service. On Thursday evening, the company announced that it’s spinning off TripAdvisor into its own publicly-traded company. TripAdvisor will go public with its flagship brand and 18 other travel media and advertising brands. Currently, in addition to the TripAdvisor website, the TripAdvisor Media Group maintains a suite of travel websites, including Airfairewatchdog, Cruise Critic, BookingBuddy, Family Vacation Critic, and more.

Operating in 29 countries around the world, TripAdvisor branded sites draw approximately 40 million unique monthly visitors and boasts 20 million registered members. In 2010, the company reported $486 million in revenue.

Expedia, meanwhile, will continue to maintain its brand site, as well as Hotwire.com, Hotels.com, Carrentals.com, and others. Originally created by Microsoft in 1996, Expedia was spun off in 1999 and was later acquired by IAC (then Ticketmaster) in 2001. In 2005, IAC spun off its entire group of travel businesses under Expedia Inc., which included TripAdvisor.

Expedia hit a bit of a bump patch with airlines a few months ago. In December 2010, American Airlines announced that it would no longer be selling tickets through Expedia. After removing its fares and schedules from Orbitz, American Airlines reported large year-over-year increases in ticket sales. Shortly thereafter, the airline claims that Expedia began “discriminating against American’s flights and schedules,” whatever that means. In either event, after American Airlines accused Expedia of discrimination, Expedia removed American Airlines fares and schedules from its site altogether.

The spinoff, which is expected to be complete in Q3 2011, will take the form of either a distribution of TripAdvisor stock to Expedia stockholders, or a reclassification of Expedia stock with stockholders also getting a fair amount of TripAdvisor stock as well. In either case, the transaction will be tax-free. The spinoff is subject to the approval of the Board of Directors, as well as stockholder approval.

Image source: Expedia.com


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