TripAdvisor began trading as an independent public company on the Nasdaq Stock Market in late December following the completion of its spinoff from Expedia Inc. Editor at Large Johanna Jainchill spoke with TripAdvisor CEO Stephen Kaufer last week about what the spinoff will mean for consumers, investors and clients, and what TripAdvisor is doing about fake reviews.
Q: What are the closer relationships with online travel agencies (OTAs) and suppliers you expect to establish now that you are no longer a subsidiary of one of their competitors?
A: Almost all of the OTAs are big clients of ours, and almost all of the hotel chains have been working with us for quite some time. We've always been willing to share a lot of our information to help them succeed and grow their businesses. Some of those clients have been more reluctant to share information and strategies back to us. Time will tell whether they open the kimono a bit more and allow us to help them reach their strategic goals.
Q: What kind of information are you talking about?
A: We have traffic on our site with all sorts of intent. We have traffic looking for a place to eat or something to do or looking for a hotel. Some are looking for deals on hotels or the best possible room. As we send leads off to our OTA partners, helping us to understand which leads are most valuable to whom makes the whole cycle better for everyone.
Q: What might TripAdvisor do differently now that it is independent?
A: It's a little early to say. ... When I'm asked the question from the investor community it's mostly been, if you like our track record so far, there is more to come. We are incredibly innovative as a company, we're on the forefront on most of the leading trends that are out there, be it mobile or social, international or China. We are expanding in vacation rentals. These are newer areas for us. I don't think of Expedia as having hindered our growth, but I'm happy not to have to ask anyone's permission to do anything now either.
Q: You went public, but this was not a traditional IPO. Are you looking for more cash flow?
A: TripAdvisor is already very cash flow-positive and very profitable. We will be earning enough money such that we don't need to raise any more money at this point in time. For us, it's the independence -- it's the ability to foster the closer relationships with the other clients and to take flight as a pure media company as opposed to a hybrid media transaction company.
Q: What do you make of Expedia's announcement of its Verified Reviews feature coming right at the time of your spinoff?
A: I knew it was coming for some time because I was part of Expedia. ... We don't think consumers care whether reviews are verified by the stay vs. verified by the scale that TripAdvisor offers. So the message has always been, when you have a couple hundred or a couple thousand reviews on TripAdvisor, you know what you are going to get.
Q: Are there penalties for hotels that engage in fake-review scams?
A: If a hotel were to try to game our system ... we don't post the review and we give them a warning. If they were to come at it more deliberately themselves or through a black-hat reputation management company, we will take away the bad reviews, penalize them, and the worst offenders will get a red badge on their property that states we have reason to believe that this property is attempting to manipulate our ranking system. Smart consumers see that and perhaps think twice about staying at that establishment.
Follow Johanna Jainchill on Twitter @jjainchilltw.