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Expedia Group

Expedia Group

Tagline

Where you book matters

Net Worth

$25,000,000,000

Started in (City)

Redmond, Washington

Started in (Country)

United States

Incorporation Date

22nd December, 1996

Bankruptcy Date

-

Founders

  • Rich Barton

About

Rich Barton is the founder of this Travel technology industry. According to Rich Barton, the company’s first CEO, the word "Expedia" is derived from a combination of "exploration" and "speed". Expedia Group is an American online travel shopping company for consumer and small business travel. Founded as a division of Microsoft in October 1996, Expedia was spun off into a public company in 1999. Liberty Expedia Holdings is the predecessor of this company and its websites are primarily travel fare aggregators and travel metasearch engines, including : Expedia.com, Expedia Cruises, trivago, Egencia, ebookers, Wotif.com, CheapTickets, HomeAway, Hotels.com, Hotwire.com, Orbitz, Travelocity, trivago, CarRentals.com, and Vrbo. In 1996, Expedia became the first online travel agency: Microsoft Expedia Travel Services. They go public in the heat of the dot-com boom and continue to grow through the early 2000

Beginning

In 2001, IAC/InterActiveCorp (known at the time as USA Networks Inc) bought a controlling interest in the company for an estimated $1.5 billion. In 2003, it was fully purchased by IAC/InterActiveCorp. Rich Barton resigned as CEO and was replaced by Eric Blachford. 2003 IAC invests in the travel space, during this time IAC acquired Expedia.com, Hotwire, Hotels.com, Egencia corporate Travel, and Tripadvisor. In December 2004, IAC announced its plans to spin off IAC Travel into Expedia. In August 2005, IAC spun off Expedia Inc., which owned its travel group of businesses including Expedia. In December 2011, Expedia Inc. spun out TripAdvisor Media Group, retaining its portfolio of travel transaction brands. On December 21, 2012, Expedia bought a majority stake in travel metasearch engine Trivago in combined cash and stock deal worth €477 million (approximately $630 million). In 2014, Expedia acquired Wotif.com. In January 2015, Expedia acquired Travelocity from Sabre Corp. Expedia previously partnered with Travelocity to provide the technology platform for Travelocity’s US and Canada points of sale. In 2015, Expedia acquired Orbitz for $1.6 billion in cash. In July 2015, Expedia and Marc Benioff, CEO of Salesforce.com participated in an investment of $11M in Wingz. In 2015, Expedia bought HomeAway. In March 2017, Chelsea Clinton was named to the board of Expedia. In her newly named position, Ms. Clinton will get $45,000 a year in cash, plus $250,000 a year in stock vesting over three years. In August 2017, Mark Okerstrom became the President and CEO of Expedia Inc. In March 2018, Expedia Inc. announced that it had changed its name to Expedia Group Inc. On December 4, 2019, Mark Okerstrom and Alan Pickerill resigned as CEO and CFO, respectively. At that time, Expedia Group’s chairman, Barry Diller, took over day-to-day operations, while the Chief Strategy Officer, Eric Hart, became acting CFO. In February 2020, Expedia announced it was cutting 3,000 jobs, roughly 12% of the workforce, citing a "disappointing 2019." Diller, in his role as acting CEO, stated the company had become “sclerotic and bloated” and that employees were “all life and no work.” On 23 April 2020, Peter Kern was appointed as CEO of Expedia Group.

Road to Success

The road to success began in August 2005, when IAC spun off Expedia Inc., which owned its travel group of businesses, including Expedia, Expedia Corporate Travel (now Egencia), TripAdvisor, Classic Vacations, eLong, Hotels.com, and Hotwire.com. In December 2011, Expedia Inc. spun out TripAdvisor Media Group, retaining its portfolio of travel transaction brands. In 2012, Expedia's Egencia unit acquired Via Travel, the largest travel company in Norway. In 2014, Expedia acquired Wotif.com for $658 million. In January 2015, Expedia acquired Travelocity from Sabre Corp for $280 million. In 2015, Expedia bought HomeAway for $3.9 billion. Expedia Group has its headquarters on Elliott Bay in Seattle. On April 2, 2015, Expedia announced that it would move its headquarters to the Interbay neighborhood of Seattle by the end of 2018, purchasing the Amgen campus on the Elliott Bay waterfront for $228.9 million. As part of the move, Expedia is proposing an expansion of office space at the 41-acre (17 ha) campus to 1.23 million square feet (114,000 m2) to accommodate employees, designed by ZGF Architects. The move was later delayed to 2019, citing some logistical hurdles including the commute from the Eastside to Seattle as well as traffic congestion near the campus. Incentives for employees to seek alternative forms of transportation were also announced, with the company exploring company shuttle services from parks and rides in Redmond. In 2008, CNN Money ranked Expedia third in the "Internet Services and Retailing" sector of its list of most admired companies in the United States. In addition to the campus, Expedia gained ownership of the Helix bridge, now named Expedia Group Bridge, and a plot of land now used as a transportation hub for Expedia employees.

Challenges

Expedia’s first acquisition was Travelscape for US$89.75 million and VacationSpot.com for US$80 million on March 17, 2000. It subsequently acquired Classic Custom Vacations in March 2002 for $78 million. The company has made four divestments, in which parts of the company are sold to another company. On December 31, 2000, Technology Crossover Ventures acquired a 7% minority stake in Expedia for $50 million. IAC acquired a 65% majority stake in the company on February 5, 2002, for $1.372 billion, and a year later, on August 8, 2003, USA Interactive acquired Expedia for $3.636 billion. Expedia was ultimately spun off as a separate entity with a value of $7.981 billion. The company made the most acquisitions in 2002 when it acquired three companies: Classic Custom Vacations, Metropolitan Travel, and New trade Technologies. In January 2015, Expedia acquired the online travel agency Travelocity from the tech firm Sabre Corporation for $280 million. On January 18, 2011, Travelscape, a subsidiary of Expedia Inc. based in Las Vegas, was ordered to pay $6.3 million in back sales taxes to South Carolina by the state’s supreme court. Travelscape argued that South Carolina’s efforts to tax online retailers located out-of-state violate the Dormant Commerce Clause. In a unanimous ruling, the court determined that the company has a presence in the state sufficient to be required to collect sales tax. While Travelscape does not have physical facilities in South Carolina, the court determined that frequent sales trips made by its employees and the fact that the company furnished hotel rooms in the state establish its presence for tax purposes.

Failures

One of the major drawbacks was when Mark Okerstorm the, CEO of Expedia's (2017-2019) journey, ended. In August 2017, after Expedia Group’s then-CEO Dara Khosrowshahi announced he was quitting to take the top job at Uber, Skift evaluated the potential replacements and named Mark Okerstrom as the most likely candidate. Okerstrom, 46, won the job for two key reasons. During his half-dozen years as the chief financial officer, he had shown a steady hand at overseeing consistent earnings growth. Okerstrom also led several well-regarded acquisitions, such as of home rental company HomeAway, since rebranded as Vrbo. So it’s tragic and ironic that Expedia Group’s board of directors, led by crucial investor Diller, pushed out Okerstrom based on concerns about steady earning growth. For example, during the second quarter of this year, Okerstrom’s team raised guidance for investors about the earnings the company would generate. Then management revised its forecast downward — creating “credibility issues” with investors. In the third quarter, Expedia’s adjusted earnings were flat. To be fair, Expedia did meet earnings goals for much of Okerstrom’s tenure. Okerstrom said he wanted to take advantage of opportunities through cross-selling and cooperation among various Expedia brands. Okerstrom wanted to change the playbook at Expedia Group. The plan mirrored in some ways the moves at Booking Holdings, its more massive rival. Booking Holdings CEO Glenn Fogel has recently been pushing for more cross-selling and cooperation among brands that had formally acted as independent fiefdoms in many ways. But speed may have been an issue. Reorganizations always take time and can be distracting. One of Okerstrom’s most fateful decisions may have been to approve the rebranding of the home rental division from HomeAway to Vrbo. Shifting HomeAway to Vrbo meant Google had to crawl for new information. The effect on referrals and bookings growth was more impactful than Expedia Group had projected. Vrbo remains a more recognized brand. It has had stronger growth in Google search rankings than HomeAway. The payoff will likely come, though it’ll be too late for Okerstrom. The broader home rentals business seemed to be in disarray. It’s unclear to what extent operational problems were the cause of Okerstrom’s decision. Some insiders argue that the reorganization makes sense.

Achievements

  • Expedia Group won for Best Company Work-Life Balance and Best Company Perks & Benefits. (2018)
  • Best company for work life balance (2018)
  • Best team for products (2017)
  • Best company for perks and benefit and compensation (2017)

Subsidies

  • Travelocity
  • Expedia.com
  • Expedia Cruises
  • trivago
  • Egencia
  • ebookers
  • Wotif.com,
  • CheapTickets
  • HomeAway
  • Hotwire.com
  • Hotels.com
  • Orbitz
  • CarRentals.com
  • Vrbo

CEOs

  • Rich Barton (1996-2003)
  • Eric Blachford (2003-2005)
  • Dara Khosrowshahi (2005-2017)
  • Mark Okerstorm (2017-2019)
  • Barry Miller (2019-2020)
  • Peter Kern (2020-present)