Thursday 16 February 2012

TripAdvisor Disappoints Investors As Google Places Looms

A few days ago, Social Barrel posted this blog about TripAdvisor and we found it interesting reading. The original post can be found here

"TripAdvisor Disappoints Investors As Google Places Looms
Barely three months after being spun off Expedia, TripAdvisor is already finding times are tough without big brother watching over you. The recommendations service that attracts 50 million unique visitors every month and operates in 30 countries in 21 languages has just reported less than impressive earnings on an overall pessimistic outlook.

TripAdvisor registered 2011 revenue of $637 million, a 31 percent jump over the previous year, and net income of $177 million, a 28 percent increase. This jump however did not impress Wall Street as the company has sounded earning warnings that the company’s revenues could dip in the next year. The news pushed the stock price down 15 percent in one day, to $30.04.

TripAdvisor was part of Expedia until only last December when the company was spun off as a standalone entity. CEO and co-founder Stephen Kaufer says the outlook may be pessimistic because of their increased advertising and marketing efforts in Asia and China.

He however says the company is growing at a healthy rate. TripAdvisor will, needless to say, be well advised to take extra care when it comes to the credibility of recommendations on the site. Quite a number of hotel owners have complained that the reviews are not always genuine and that TripAdvisor is not doing enough to authenticate these reviews.

In fact, the British Advertising Standards Authority banned the company’s UK site from saying reviews “were from real travelers, or were honest, real, or trusted,’’ since it does not verify the identity of every user behind every review.

This piles pressure on TripAdvisor as the success of their business lies in the credibility of the feedback and recommendations on the site.
The company will also have to contend with the entry and expansion of Google Places, a service similar to TripAdvisor that Google offers. CEO Kaufer however brushes this threat aside saying that if Google could predict what customers want better than TripAdvisor, then Google deserved to be in the lead.

With large companies such as Google morphing into multifaceted entities with tentacles all over the place, it’s difficult to say what the realistic future of companies such as TripAdvisor is."


  1. Interesting post, thanks. Although I can see why Expedia wanted to get TripAdvisor off its books, it's not all over quite yet for the review site.

    The next step for them must be to accept video reviews. People will be less likely to make false claims if they are on video.

  2. We couldn't agree more (video) - watch this space!


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