TripAdvisor chose to expand into new countries and languages rather than chase every travel category. The company bought Viator for attractions and activities, but its vacation rental push failed despite heavy investment. Google's dominance in search made competing on reviews alone increasingly difficult.
So one of the topics that we're always discussing here as marketplace kind of founders and teams, as far as, you know, when it comes to expansion and, you know, category and geo expansion, and this is related to a topic that I wanted to discuss here, which is kind of the evolution of TripAdvisor, right? As you scaled. So could you share more about, you know, how you thought about, you know, category expansion and geo expansion?
Sure. When TripAdvisor was initially wonderfully successful, oh wow, we're riding a rocket ship. So You know, 3, 4 years into this, it was not quick. We thought, should we be the advisor for consumer electronics, for notebooks? Amazon's doing that, but for software, for like everything else and take that blank advisor as the way to build. And I thought carefully about it because it was pretty tempting. But decided travel's a trillion-dollar-plus industry and like we'll never tap out if we just stick to travel. Whereas in every industry there was gonna be some competitors. And so focus company, broad foundational company. You can be a broad foundational company like if you own hardware, if you have something that makes your offering that much more compelling when split across different verticals. But we looked closely and said like it's a review system, the technology is not the name of the game. And how hard is it to create a review platform for software, you know, for consumer electronics? On a separate, like, it's easy. So that wasn't gonna be a competitive advantage. Whereas in travel, people go in international destinations and your opinion on what hotel is awesome, if you're writing in English, is actually still valuable to someone who lives in Paris and might be going to that same hotel if they can read it. So, hey, there's a translation problem, but there's a huge network effect in expanding geographically. And so that's really what we did initially. We said, hey, we have all the hotels and attractions in the US, then to Europe, then to rest of world, then to 20-something different languages. And that was our method of growth for the first decade plus. Again, if, you know, people need to grow into different verticals or different areas for different reasons, is it you have to because your competitors there and you're missing sales? Is it for pure growth opportunity? But just remember, you pick up new competitors if it's a competitive space and you detract from what you're already probably pretty good at. So if you're at a 30% market share and you don't think you can grow, absolutely. So we expanded geographically. Then we said, hey, look, Google's coming in the hotel space. You know, it, that's really, really bad news because they're the only company up funnel from us. And they started to sort of take traffic that was normally coming to TripAdvisor and divert it to their own product. And we saw that as getting worse. You shore up your product, you try to differentiate, and then you think nobody wants to fight with Google. It's just, just a bad idea. Hey, what about attractions? That's a new category. Google's not playing there. You're kind of screwed if you're a traveler and you want to book a tour or ticket. There's no good site. People go to TripAdvisor, already a major category, already had a ton of traffic, but we didn't do any booking. So we spent a couple hundred million dollars buying Viator, which was a company, you know, doing some revenue, but not an interesting amount, no profit. They were struggling, but we had a ton of traffic as asset and believed that that category would play well in the future. It's kind of the last category to come online in the travel space. So that's where we put a bunch of our effort. And then we can talk about it now or later, but like we also tried to do a lot in vacation rentals because they were becoming popular, key lodging, and we failed at it. Like didn't work. Nobody goes to TripAdvisor to do vacation rentals now. And we spent probably hundreds of millions of dollars acquiring our way into that space. And that was a regret. We should have just stayed away or done a pure licensing deal. Because we're this hotel travel experience, plan your trip reviews platform that is now deciding to go head to head with Airbnb and VRBO. Really? Because we're gonna have a better offering? No. Because we'll also have hotels?
Yeah.
We went because we thought our customers would really need to have that booth selection. Turns out we convinced ourselves of that, but it's really not true. People go to Airbnb when they want Airbnb. They go to Booking or Expedia or TripAdvisor or Kayak when they want a hotel. And people generally don't mind shopping on 2 different sites. Maybe the typical travel shopper shops on a lot of different sites. But it's just faulty strategic logic that says you have to address all of those consumer needs because we're certainly, we're not an airline site, we're not a train site. We don't do a lot of your travel needs. Why did we think we had to address rentals even though customers clearly wanted the Airbnb, VRBO type product?
