TripAdvisor’s first-quarter revenue fell 3% compared to 2015, and net income dropped 57%, largely due to increased marketing expenses of 10%. The financial struggle caused by the Instant Booking expansion has led to a sharp drop in stock value. At the end of 2015, TripAdvisor stock was valued at $86.15 per share. As of writing this article, the share price is $47.91. That’s a 44% drop.
Priceline could find TripAdvisor's 351 million monthly active user base to be attractive. In addition, Priceline could combine TripAdvisor's user-generated reviews, its own core hotel and airline bookings and OpenTable's restaurants booking to create a "one-stop travel destination on the web.
However, a combination of Priceline and TripAdvisor may not go over well with regulators who are "likely to push back" given the "already largely consolidated" online travel space.
This makes it even more important to make sure you are focused on a ‘Book Direct’ strategy for 2017, focus your energy, time and resources on building your business while keeping an open awareness of the bigger picture and the big players moves.
TripAdvisor’s tumbling share price has led to much speculation on whether they will be acquired in the near future. It’s rumored that both Priceline and Google are interested in TripAdvisor. Google might be a longshot, but their own expansion into the travel market in 2016 signals interest. While most people view Priceline as the most likely option, if they were to acquire TripAdvisor it could be hampered by anti-trust issues.
AT CLOSING, DEC 19TH
PRICELINE GROUP INC/THE+4.55
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Priceline Group is a huge internet company that continues to grow, is immensely profitable and usually over-delivers on its forecasts. Yet cutthroat competition in the online travel industry has left its stock looking dull lately.
The $64 billion behemoth and its fiercest rival, $16 billion Expedia, have been going head to head for the best assets, as newer vacation-rental entrants like HomeAway and Airbnb -- valued at almost $26 billion in its latest funding round -- take some market share.
Most of the big takeover candidates have already been bought up: Kayak and Booking.com are owned by Priceline, which has also been investing in businesses abroad such as China's Ctrip.com, while Travelocity, Orbitz and HomeAway have all sold to Expedia. In fact, the September completion of the Orbitz deal allowed Expedia to reclaim the No. 1 position in online bookings.