TripAdvisor started as a review site in 2000 but hit a wall: users read reviews then left to book elsewhere. By 2012, the company bought Viator and La Fourchette to let people book hotels, restaurants, and attractions directly on the platform, turning reviews into transactions.
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I wanted to spend some time actually going back to your experience at TripAdvisor since that was an early travel marketplace and one that I think we can learn a lot from since it evolved. And I believe you mentioned on a previous podcast, I think it was the first round interview about how it transitioned into being more of a transactional in nature marketplace. So could you maybe walk us through what led to that shift and then how you were able to actually pull it off?
Yeah. So TripAdvisor is a really interesting company. It was founded in 2000, so it's 25 years old now. It's one of these original Web 1.0 companies. Unfortunately, they started a travel company right before September 11th, and that was, you know, an existential event for the company. And so they had to figure out really quickly, how do we create a profitable business? And the insight was that with the web, you could make a decision on which hotel you wanted to go to based on the reviews and opinions of other travelers versus just having to rely on a travel agent. Because back in 2000, if you wanted to book a vacation, you'd walk into a travel agent's office. they would hand you 3 different brochures with 3 different prices, and you would have to pick between them, not really knowing which hotel was going to be better and having all of them look, you know, absolutely beautiful from the brochure. And so one of the interesting things is that it turned out that this user-generated review model was also a perfect match, not only for what customers wanted, but also for the growing opportunity around SEO. And so TripAdvisor was able to create this incredibly effective SEO flywheel by having millions of reviews constantly coming in that were fresh and indexable to feed the Google algorithm. So across millions of different searches, TripAdvisor would be the number one organic result. And so from 2000 to 2012, the company built a really strong business there, a billion dollar a year revenue business. It was part of Expedia and then got rolled out as an independent public company. And as an independent public company, the company started to ask itself, Well, what's next for us? And it was pretty clear that the problem that TripAdvisor needed to solve was that people were coming through TripAdvisor rather than to TripAdvisor. So they would search on Google, they would come read some reviews, and then as soon as they wanted to get serious about a particular hotel, they wanted to see prices, they maybe wanted to book, they would have to leave TripAdvisor. And as a result, people actually didn't really understand the value that TripAdvisor was playing. And so TripAdvisor had this really leaky bucket. It was only monetizing a very small fraction of the transactions that TripAdvisor informed. And so the company decided to add the ability to both price shop as well as to book on TripAdvisor, both for hotels as well as for restaurants and attractions. And so that started around 2012, 2013. TripAdvisor started to move from a really ad-oriented, user-generated content platform to more of a transactional marketplace, both through internal product innovation as well as through acquiring a couple of critical companies like Viator for attraction bookings and La Fourchette for restaurant reservations.
