Peter Thiel: 'Almost everybody (tech CEO) I know' shifted right
At Culture, Religion & Tech, take II in Miami on October 29, 2024
Read more...Vacation rental marketplace and chief Airbnb competitor HomeAway announced today that it has been acquired by travel booking site Expedia for $3.9 billion.
The news came during the Q3 earnings call for HomeAway, which saw a 24.4 percent rise in the its bottom line: $23.5 million in Q3 earnings versus $18.9 million in the same quarter last year. Revenue for the quarter grew 11.6 percent from $117.1 million last year to $130.7 million this most recent quarter.
Though the earnings report beat analyst estimates, the big news of the day is the company’s folding into Expedia, especially since it’s a clear indication that Expedia wants to take on Airbnb. Expedia Chairman Barry Diller played down HomeAway's competition with Airbnb, but nobody else doubts the two will be butting heads in the years to come.
HomeAway was founded in 2005, a three year head start on Airbnb, but it only hosts 1.2 million listings compared to Airbnb’s two million. And while Airbnb isn’t yet public, its funding round from earlier this summer pegged its valuation at over $25 billion.
The meteoric rise of Airbnb can partly be attributed to its marketing "sexiness.” After all, people don't see it as simply a vacation rental site with a website, but rather as a community of worldly hosts and guests. It’s a place where, alongside houses and apartments for rent, one can find private islands, igloos, sailboats, and castles.
Brian Sharples, CEO and founder of HomeAway, wouldn’t have seen it this way a few months ago. He saw the two companies as different because HomeAway today makes most of its revenue from subscriptions paid by homeowners. Airbnb charges guests a commission for every rental.
That changes going forward because HomeAway also introduced today a “traveler service fee,” amounting to a roughly six percent commission fee on all transactions through the site. This new revenue stream opens the door to a world of possibilities: most obviously, the company could reduce subscription demands on hosts, thus encouraging apartment owners and homeowners with extra rooms to list on the site. In other words, it would be the first step on to Airbnb’s turf.
Since last summer, Expedia has been on an acquisition spree.
In July 2014, the company bought Australian travel company Wotif Group for $658 million, or $3.09 per share (based on July 4, 2014 exchange rates), allowing the service to expand its presence internationally to the Asia-Pacific region. In January of this year, the company snapped up Travelocity for $280 million. A month later, it purchased Orbitz for $1.6 billion, or $12.00 per share in cash.
Another hotel booking website, Hotels.com, has been part of Expedia since the early 2000s.
At Culture, Religion & Tech, take II in Miami on October 29, 2024
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Airbnb.com is the “Ebay of space.” The online marketplace allows anyone from private residents to commercial properties to rent out their extra space. The reputation-based site allows for user reviews, verification, and online transactions, for which Airbnb takes a commission. As of June, 2009, the San Francisco-based company has listings in over 1062 cities in 76 countries.