Interesting news in online travel this afternoon, spanning the Boston and Seattle areas—and plenty of destinations in between. Bellevue, WA-based Expedia (NASDAQ: [[ticker:EXPE]]) said it plans to split into two publicly traded companies—one will be Newton, MA-based TripAdvisor (which has been part of Expedia since 2004), and the other will remain Expedia, which also owns Hotels.com, Hotwire, and a number of other travel brands.
The company said the split will take the form of either distributing TripAdvisor stock to Expedia stockholders or reclassifying Expedia stock (so Expedia stockholders get a proportionate amount of TripAdvisor stock). The deal is expected to be completed in the third quarter of this year, and is subject to final approval from Expedia’s board and stockholders.
TripAdvisor is based around a huge collection of user reviews about hotels, restaurants, and other businesses, which consumers consult when making travel plans. Its main source of revenue comes from collecting fees whenever users click through the TripAdvisor listings to make a reservation.
Reached for comment today, TripAdvisor provided a statement from its co-founder and CEO, Stephen Kaufer: “I’m excited to announce the planned spin-off of TripAdvisor and the TripAdvisor Media Group from Expedia, Inc. to become an independent, publicly traded company. We look forward to this next stage and to our continued growth and innovation in inspiring and helping travelers plan the perfect trip.”
That doesn’t say much, of course, but the move makes sense for both parties—and isn’t all that surprising. TripAdvisor was acquired by IAC (NASDAQ: [[ticker:IACI]]) in 2004, back when IAC owned Expedia, and was nominally put under Expedia’s charge; Expedia was spun off later that year. But TripAdvisor, which has been raking in the dough for years ($486 million in revenue in 2010), was never really integrated into Expedia; the two entities remained largely separate.
A little over a year ago, TripAdvisor’s Kaufer told my colleague Wade, in an in-depth interview, that Expedia had pretty much left his company alone since the acquisition. “I love the autonomy that Expedia has given TripAdvisor and the whole media group,” Kaufer said then. “I’ve told my boss and I’m happy to tell the public that when the rules of engagement change and Expedia wants to start micromanaging what we do here, it’s their right. They own the company. But I won’t be CEO.”
Sounds like Kaufer isn’t going to be leaving anytime soon (unless there’s another surprise in the works). We’ll continue to monitor this deal, and see if we can’t uncover more details about exactly why the split is happening, and why now.
The online travel world is also bracing for a possible ruling in the case of Google’s contested acquisition of Cambridge, MA-based ITA Software, whose technology organizes data on flight itineraries and powers airfare shopping sites. Reuters and other news outlets have reported that a decision from the U.S. Department of Justice might be just days away.
