Created in 2000 as an unnamed B2B tool, Tripadvisor has experienced a catastrophic start. The initial project, based on a content search engine for travel gates, does not take off, and eighteen months after its launch, the company generated only $ 500 in turnover. The happy reversal will occur in March 2002, when it became profitable, before being sold for 4 years later $ 200 million. Why talk about a beautiful, but old story, in our section devoted to tech trends? I let you discover this in conclusion.
A B2B model without traction or customers
At its origin, Tripadvisor was not a consumer platform. The idea of Steve Kaufer, its founder, was then to index all the review content available on the Internet (blogs, forums, editorials) to resell them in the form of a search engine in Yahoo Travel, Expedia or Travelocity. The “TripAdvisor” brand was only a technical name, intended to make the interface accessible to make demonstrations.
The product was launched in October 2000, the demo works … but does not recognize any appetite, no travel player wishes to buy it. In a year and a half, the startup does not sign only one contract (thank you Lycos) for a total of $ 500 in turnover. Suffice to say that investors are starting to doubt.
September 2001 as a break.
After the September 11 attacks, the travel market freezes. Steve Kaufer returns to his investors to offer them to give them the money that remains at the checkout. But they refuse, you might as well try a last pivot. The team of ten people then turned to a series of experiments in B2C, without a precise idea, but in an urgency to find a model that generates income, the runway is short.
A pivot discovered in an emergency
It was in December 2001 that everything is played out, TripAdvisor tests the idea of inserting links to hotels on Expedia from its advice pages, and being paid at the click. Expedia accepts a test, the conversion rate is good, and TripAdvisor receives its first order with 20,000 clicks paid to $ 0.50. The model was finally found, from March 2022, the startup reached profitability.
❝ The model was not in the business plan. It was our fourth attempt. But he worked, and he generated cash. ❞
Steve Kaufer
SEO, a strategic lever
It must be said that at that time, the major booking sites are poorly designed for SEO. Tripadvisor, on the contrary, is structured as an editorial site with readable pages, updates regularly, and filled with reviews generated by users. As a result, Google is starting to raise Tripadvisor in research on destinations or hotels and traffic explodes, and this for free, a real boon.
This SEO mechanics becomes the company’s economic engine, each user sent to a reservation platform is monetized, with an almost zero marginal cost.
A sale motivated by the fear of falling back
In 2004, the MAGNAT des Medias Barry Diller offered $ 200 million to acquire the company. An offer that Steve Kaufer accepts, despite solid figures, around $ 50 million in turnover, for $ 20 million in Ebitda. So why give a startup that is about to be an excellent milk cow? First reason, Expedia represented at the time most of the turnover, with a contract that can be terminated within 48 hours. But it is above all the memory of his previous business, where the actions that were worth “several million” have become “zero”, which pushes him to sell, one is better than two you will have it.
❝ If I had been able to sell part of my actions, I would probably have refused the acquisition. But it was not done yet. ❞
Continuous growth under Expedia … until independence
Having become a subsidiary of Expedia, Tripadvisor continues to operate independently, with sustained growth. In 2011, the company was listed on the stock market at $ 24, the quotation will have a real success up to $ 96. On the audience side, Tripadvisor attracts more than 400 million unique visitors per month and remains profitable for almost 20 years, including in a purely media model.
Inbounded mutation attempts
But to get rid of his dependence on Google, TripAdvisor tries several times to transform himself, last attempt with date with Tripadvisor Plusa paid subscription launched during the pandemic to offer exclusive prices. The product struggles to convince the hoteliers, then is abandoned. In 2022, Steve Kaufer, who had made it a strategic priority, left his function, after 22 years at the head of the company.
Reinvent your role in front of Google and switch to Openai & others
If for twenty years, Tripadvisor has lived in the shadow of Google, the search engine, which has become its main traffic distributor, has gradually integrated opinions, price comparators and booking modules, cutting off the competitive advantage that had made the site success.
Despite its many attempts, Tripadvisor has never found a sustainable growth relay outside the SEO model. But a new actor today redistributes cards: generative artificial intelligence.
Travelers are slowly starting to prepare their stays by questioning Chatgpt which aggregates information without necessarily returning traffic to sources sites.
A dream opportunity for TripAdvisor which has a rare asset, a global database of opinion, notes and structured content, accumulated over two decades. By becoming a data and reliability provider for generative models, the company could position itself as an essential partner for new travel assistants. The challenge is to ensure that its contents now feed the responses of AI.
From the era of SEO to that of the GEO, the generative Engine Optimization stands out as the new playground for many companies that hold high -added databases. It is on this ability to bring out your content in the responses generated by the AI that Tripadvisor will play its survival as a central actor in digital journey. A rare opportunity, which is not limited to TripAdvisor business, to a good manner!
