Expedia spins off TripAdvisor
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Expedia, the largest online travel agent, is to spin off the TripAdvisor brand, separating the businesses into two publicly traded companies.
Expedia will continue to run brands such as Hotels.com and Hotwire.
The travel agent says it expects the transaction will take the form of a distribution of TripAdvisor stock to Expedia shareholders or a reclassification of Expedia shares.
The move, which is expected to complete in the third quarter of the year, is still subject to conditions including shareholder and board of directors’ approval.
It is not thought the separation will affect any management roles at the two companies.
The move aims to let existing shareholders benefit from TripAdvisor’s growth while Expedia increases investment in marketing in order to ward off its closest competitor Priceline.com, according to analysts.
Shares in Expedia rose 15% to $25.89 (£16.15) in after hours trading following the announcement.
Expedia purchased TripAdvisor in 2004 for $212m (£132m). TripAdvisor and its 18 related brands now attract more than 50 million unique monthly visitors across 29 countries and generated $486m (£303m) in sales in 2010.
TripAdvisor appointed former Hotwire executive Barbara Messing as CMO to lead its global consumer marketing efforts including brand development and mobile partnerships.
Readers' comments (1)
IUVO Marketing Ltd | Mon, 11 Apr 2011 2:26 am
18 other brands will also be spun off with to TripAdvisor, to enable Expedia to focus on its marketing. The move should not harm TripAdvisor too much as it is the world's number one travel company, and Expedia has also seen its shares rise 15% since the news of the transaction was released. It will be interesting to see which direction TripAdvisor's marketing will now go in, and the direction of web travel companies in general, as they have really been soaring as of late. Sarah Hooper, IUVO Marketing.
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