It’s probably the quietest Boston-area public offering of the year. But why? Maybe because it’s a spinoff from an already public company, and the deal was announced back in April. Or maybe because New England doesn’t go wild for its consumer-focused tech companies the way some other regions do. Or maybe everyone is just sick of online user reviews (and planning holiday travel).
For whatever reason, tomorrow’s first trading of Newton, MA-based TripAdvisor’s stock on the Nasdaq under the symbol “TRIP”—and the company’s official spinoff from Bellevue, WA-based Expedia (NASDAQ: [[ticker:EXPE]])—doesn’t seem to be getting talked about or celebrated that much in local tech circles. And that’s probably just fine with TripAdvisor, which has always been understated when it comes to PR. (Its stock has already been trading under “TRIPV” for the past couple weeks.)
The company, which has more than 1,000 employees (doubled in the past two years), is a major international force in online travel and has been raking in the cash for the better part of a decade. TripAdvisor made $486 million in revenue in 2010 and is on pace for more this year. From what I can tell, the firm has never been particularly chummy with Boston media, marketing, or trade organizations. It does recruit heavily in the area though.
TripAdvisor started in 2000 as a search engine to help people find reviews of travel destinations. The company quickly became a destination in itself for user-generated reviews, and it figured out the lead-generation model before most people had even heard of lead-gen. The company makes money from advertising and referral fees when consumers book flights and hotels through its partner sites. One tidbit: Founding CEO Stephen Kaufer told my colleague Wade last year that TripAdvisor was “a couple months shy of going out of business” in late 2001 before it figured out its revenue model.
In 2004, TripAdvisor was bought by Internet giant IAC (NASDAQ: [[ticker:IACI]]) and became part of Expedia, which itself was spun out from IAC the following year. TripAdvisor the company has grown to encompass nearly 20 travel sites (including TripAdvisor.com, SeatGuru.com, and BookingBuddy.com) and is expanding aggressively in Europe, China, and other locales.
It sounds like going public should raise TripAdvisor’s international profile, but being independent of Expedia won’t change things much. The companies basically operated separately over the past seven years. One broader trend to watch: whether user-generated content for travel, hotels, restaurants, and other businesses remains a lucrative property to own, or whether it ends up getting lost in the noise of bigger and badder marketing devices of the coming decade.
Locally, there’s an interesting juxtaposition of TripAdvisor with other prominent travel tech firms. Just as TripAdvisor is going independent, Cambridge, MA-based ITA Software is being integrated into Google (NASDAQ: [[ticker:GOOG]]) as the search giant ramps up its own travel-site capabilities. And Kayak, the Connecticut-based travel meta-search company with a strong Boston presence, filed for an IPO late last year but has been waiting out the market and evolving its own offerings in this super-competitive sector.
