In this interview, Uber CEO Dara Khosrowshahi reflects on his early tenure as the rookie CEO of Expedia. He describes how Expedia operated as a holding company with brands like Expedia.com, Hotels.com, Hotwire, and TripAdvisor, and faced slowing growth as airlines and hotels began selling directly online, causing the stock to fall. Khosrowshahi recounts negotiating a deal with Priceline to acquire Booking.com, which was then a small but promising online travel agency. When the board reviewed the deal after a disappointing earnings quarter, they questioned why the company should spend a billion and a half dollars on an acquisition while its own performance lagged. The board’s pushback, combined with Khosrowshahi’s loss of confidence after the poor quarter, led him to back off instead of pressing the deal. By the time he reconsidered, Priceline’s stock price had risen and the acquisition fell through. Khosrowshahi later notes that Booking.com became the dominant player, eventually rebranding Priceline, and reflects that his biggest mistake was not trusting his conviction despite clear long‑term market fundamentals—travel growth outpacing GDP and early online adoption. He emphasizes the lesson that confidence in strategic vision must outweigh short‑term setbacks.
Chapters
My confession is actually my early, I would say early years as CEO at Expedia. And I was a rookie CEO and not a particularly good one at the beginning. The stock, when we had spun off the company, the stock was around $40, $45 a share, and it had drifted down Trends weren't great, travel trends weren't great. A lot of sites were going direct for the first time, you know, because the first instantiation of online travel was really the online travel agents, us, Travelocity, Orbitz, et cetera. And then the hotels and the airlines especially started getting their act together and more and more of the traffic was going direct, whether it's a Delta or a Hilton or Marriott, et cetera. The growth of the industry really started slowing down. And as a result, the stock was suffering.
And how many people worked for you at this time?
I think at the time it was about 5,000 or 6,000 people.
Wow.
And it was pretty scale business and it was structured as a holding company. We had Expedia.com, Hotels.com, Hotwire, TripAdvisor, all operating independently. And I wasn't an operator-operator, I was more of a portfolio manager. During that time, one of our largest competitors was Priceline, and they had just bought what was then a small company called Booking.com. I had gotten to know them, and we had negotiated a deal to buy them out.
Them meaning Booking.com?
It was Priceline at the time.
You weren't competing to buy Booking. You had gotten to know Priceline and you were—
And they had bought Booking. So Got it. This was the original mistake, if you want to call it that, which is— but it was not my mistake. We didn't buy Booking.com because we poo-pooed them. Priceline bought them. And I had gotten to a deal with Priceline, not because I thought Booking was going to be amazing. It was a nice business that was growing at respectable levels at the time, but because Priceline at the time, I don't know if you remember the William Shatner commercials, all that stuff, was a really big low-cost competitor of ours. And I had the deal basically done, and we had a board meeting to essentially approve the deal. And I missed the quarter. We had earnings, they were terrible. The stock that was already in the 20s went down, I think at like 16, 17 bucks a share. And at the board meeting, when I was presenting the Priceline deal, the board started pushing back, including Barry. And I think rightfully so, and said that, hey, Dara, if you can't get your own house in order in terms of the earnings of the business, the growth of the business, why should we give you another billion and a half dollars to go buy this other company, Priceline? So shouldn't you get your own house in order first? And I think that the board did it Because they were making a proper case and a board should act as a check for the CEO. But I think they were partially doing it to test the veracity of my wanting to go forward with this. They were pushing back to see how much I wanted this deal. And I asked Barry about it one day, which is, if I had laid my body down on the train tracks, I'm sure they would've approved the deal, but I lost confidence. I was first-time CEO. It had been a rough year, year and a half, and I just backed off.
So you were just like, they're not going to approve it. I'm not going to push for it.
I didn't push hard enough. I am sure if I pushed hard enough, I would've gotten it done. But I didn't push hard enough. Now, yes, they were pushing back, why should we do this, et cetera? But they were making all the typical arguments that you should when you're testing someone else. I said, we're going to wait for a quarter or 2. It's fine. I'm going to get my own house in order, et cetera. By the time we did, Priceline was also suffering to some extent for the same reasons. And by the time we did, that stock price had gone up. They weren't willing to do the deal. And that, you know, if you look at now Booking.com, Priceline renamed itself Booking.com because the Booking.com business has completely taken over. You know, that company's worth $140, $150 billion.
No way.
So it was a very, very, very expensive mistake of mine, whether the mistake is missing the quarter. But I think the real mistake was not being confident in my own convictions. And I knew it was a good deal.
But how did you know it was a good deal? Like if you take yourself, take, if I was in Dara's body, you know, going back then, like what would I be feeling?
I knew that the travel business was a great business. Travel would grow at GDP plus. I knew it was very, very early in the adoption of online travel. Probably travel, you know, online is probably 60% of travel market. It's probably 10%. So you knew that all of the long-term Metrics were on your side and there was wind at your back. But I was just, I was, I let myself be off balance because of a bad quarter or two. It was absolutely the right bet to make.
And you knew it and you had worked on it and built the deal.
I knew it. And you, you know, I, my background was banking, so I was pretty good at, at the deal business, but I just lost confidence.
