The idea for TripAdvisor was born in 1998 when I was planning a vacation with my wife. We wanted to go somewhere warm, somewhere sunny and we picked Playa del Carmen. It was 1998, what did a traveler do? Well, if he didn’t have any friends that had actually been there, he went to a travel agent. So, that’s what we did. We went to a travel agent and came home with three gorgeous looking brochures for three different resorts at the place. One was nicely inexpensive. The other was moderately priced and there was a luxury high end. The thing about these brochures is that they were all gorgeous, just mouth-watering pictures. You wanted to go the next day. You know, working for a living here, I was pretty interested in saving money, so I was interested in that inexpensive option. My wife said, “Hey, why don’t you check it out online? Why don’t you go see if you can find some more information about the place before we make our booking?” It seemed like a good idea, so I went online. And I went online, and it was really hard, really easy to find information about the property, really hard to find interesting information about the property. So, I had thousands of search results, all of which pointed to the exact same beautiful picture of the resort and the exact same paragraph talking about the resort and then they each had a different 800 number for a reservation. That really wasn’t what I was looking for. I wanted to find out, was this resort right

In our case, scale begets scale. You get more information which gets more people to come to the site who want to contribute more information and we continue to really grow. The result is a

When looking at the travel e-commerce in particular or when you look at all e-commerce, you’re looking at $673 billion, about 44% of which is in the travel space. That’s a huge percentage of the money that gets spent online is being spent in the travel category. It’s a worldwide spend. It’s not just in the U.S. It’s not just in individual countries. It truly is global. When you look deeper within the online travel spend, you’ll see it often broken out in a couple of categories, specifically air and then hotel and packages and car. And while their margins aren’t too good in air, margins are excellent in hotels. So, we’re very close to a transaction because most of our reviews are hotel reviews. We’re very close to a transaction that is a high margin, that’s consummated online, and that puts us again in a very nice position in the marketplace. And then when we look at the travel ad spend, we see that 38% of the bookings are actually made online. So, the travelers are online but the ad spend lags. It’s only 16%. Where the travelers are, the ad

You know at the end of the day it all starts with that rich amount of content that we have on this site. You’re able to come and see a tremendous amount of information to help you form your purchase, to help you inform your purchase decision. Why do people write? We have to ask ourselves that question. Well, they write because

That network effect, the fact that people are coming back to offer more opinions to make the site even better over and over again has left us in an incredibly strong market position. So, here we line ourselves up against the search providers. And search engines are an incredibly powerful force in our universe. They are where a lot of people, where a lot of people choose to start a research trip.

I’m often asked kind of what’s at the core of the TripAdvisor business model. At the end of the day, it’s really illustrative to look at this particular page on our site. It’s a review page for the Lenox Hotel or for any hotel. And what we’re offering is a tremendous amount of interesting, in-depth information about this specific property. On the left-hand side, you’ll see the value that we offer to the consumer, again, all for free. The beginning, if we know anything about any of your friends, we’re going to highlight it at the top of the page. In this case, my friend, John, likes this hotel. They may have liked it, they may have done a check-in, they may have written a review, otherwise indicated that they have something to share about this property.

Now, well, we didn’t necessarily invent the concept of reviews and we didn’t even invent travel review, we did in fact bring them to scale. At this point, we’re all about the next generation of that scale, of that travel review. So, if you go back to my original story of the Iberostar Tucan, it was great to be able to get the opinion of an anonymous traveler. At this point I can get the opinion of a thousand anonymous travelers. Oh, but wouldn’t it be great to be able to get the opinions of some friends of mine. In partnership with Facebook, we’ve been able to instantly personalize over 57 million visitors to TripAdvisor whereby we’re showing them something custom when they come to the site. We’re all about, with permission, giving people the ability to show each other what their reviews are so that you can see really where your friends have been, what they’re interested in and their specific opinions about properties or restaurants or attractions throughout the world. In this case, on the right, we have someone, perhaps me looking for a hotel in Boston. And before I go on and look at hey, what the wisdom of the crowds represent, it’s highlighted for me that my friend, John, here has actually reviewed a specific property. And at the top of the list, I get to see really what his particular opinion is about the property: good, bad or indifferent. And, in fact, I can click through and read his review or, maybe, I want to give him a phone call or drop him an email and say, “Hey, I saw that you stayed at this hotel in Boston. Tell me about it. What else did you do in the city?” But, it’s really TripAdvisor that’s been able to make this connection between you who’s going to a destination and your friend who’s been there already. That connection, that ability for

Mobile adoption. Today, we’re available on the iPhone, iPad, tablets, Android devices. And when I talk about being available, since we’re a global company, when I say we’re available, we’re

When we look at new geographies, China is phenomenally large. Well, we already own two of the top 10 travel sites in China, according to comScore, beginning with Daodao which was a TripAdvisor site that we launched in 2008. PhoCusWright says that we are the largest travel review site and we’re very proud of the fact that we got a relatively early start, gaining traction in the marketplace. And as the China middle class continues to grow and they start taking domestic trips and later international trips, we’re

And finally, a peek behind the covers. There’s a sign on my door still written in pen and paper that says “speed wins.” What it refers

And on that note, let’s review some of the key financial highlights. We are one of the fastest growing Internet companies of our size. We’ve been able to continue revenue growth at this pace, 30% for the last nine months because we focus on the user experience. The better the user experience, the more reviews and opinions are added to the site, increasing traffic, relevancy for advertisers and continuing to drive the cycle of improvement. As Steve mentioned, we have an enormous market opportunity which has enabled diversified revenue streams across products, platforms and geographies. We have a user generated content model which means not only do we have free content from our users, the volume richness and freshness of this content provides natural search optimization advantages, providing us with significant volume of free traffic in our mature markets. Coupled with a capital light business model, we’ve built a highly scalable efficient

The revenue trend is compelling, but not only for rapid growth, it is also diversified globally and across business models. As Steve mentioned earlier, our revenue comes from three main sources: CPCs, this is the majority of our revenue. When a user clicks on the show price button, these highly targeted leads are passed to our OTA partners and hoteliers. And display advertising is our second largest revenue category. Based on relevancy, we sell ads to enrich the user experience. The revenue source that has been growing the fastest is our subscription business. Included here are vacation rentals and business listings. Revenue by geography has also continued to diversify. Over the last three years, international

On G&A, on a pre-spin standalone basis, G&A was roughly 9%. And this includes the shared service fee from Expedia. Post-spin,