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A new CFO boards TripAdvisor for a journey into the public domain

Julie Bradley, chief financial officer of TripAdvisor

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Last year Julie Bradley’s summer didn’t last quite as long as she had intended but then great opportunities rarely fit in with one’s life plans.

The Boston-based finance chief had promised her family she would take some time off work. She had spent the previous year working intensively as chief financial officer of Art Technology Group when Oracle acquired the company. She oversaw the acquisition and then left. And she wanted a break.

But a headhunter had other plans for her, contacting Bradley to tell her about a new opening that was coming up that perfectly fitted her prerequisites for her next role.

“I wanted something in the Boston area. That was internet or technology related so that I could use my background in the tech space. Something of size - either public or going public, because I really love that aspect of the job, working with investors and telling the story. I really wanted the opportunity to work with the founder again,” Bradley explains.

The irony is that the job turned out to be chief financial officer of the world’s largest online travel site, TripAdvisor. She had found her match. After meeting TripAdvisor’s founder and chief executive Stephen Kaufer she decided it was indeed a role she couldn’t turn down. Bradley accepted heartily but with the proviso that she could spend the summer with her family. Kaufer duly agreed, and Bradley ventured on the journey with the newly public company in October 2011; thoroughly refreshed.

With topped-up energy levels Bradley could begin to work on building the financial structure of a public company because Expedia, the former parent company, had handled all the legal and regulatory activities. TripAdvisor, which offers users peer reviews of hotels and restaurants, was spun off from Expedia in mid-2011 “to unlock shareholder value”, because the two companies’ business models were becoming increasingly divergent, she explains.

 “Expedia is TripAdvisor’s number one customer, which was probably great in the early days but as it started to get more traction with online travel agencies and hoteliers it was perceived as competition.”

She says a perception was growing that advertisers wouldn’t want to spend too much on TripAdvisor “even though you were getting great value because it would ultimately benefit their number one competitor”. Investors also prefer a simpler story, the CFO adds.

Sailing into headwinds

In its first quarter trading statement for 2012 published on 1 May, TripAdvisor reported pre-tax income of $48.2 million, a slight rise on the same period the previous year ($47.4 million). Revenue for the first three months increased to $183.7 million, up 33 percent on the previous quarter, and up 23 percent on the same period in 2011.

“We have said that we expect profits to be relatively low or flat in 2012 because we have two revenue headwinds,” Bradley says.

The first of those two headwinds relates to the spin out from Expedia, which lowered the prices its pays to TripAdvisor for leads by between 10 and 15 percent, because Expedia had been paying a premium. The benefits of this had cut both ways. Whenever Expedia wanted to trial a particular location or run a marketing campaign the online travel agent would do it on TripAdvisor.

“They could guarantee they’d always be in the top placements. But now we’re not part of the family they are treating us like any other vendor.”

There is a commercial agreement in place between Expedia and TripAdvisor for a 12 month period but then prices will drop, which Bradley calculates will be “about a 5 percent hit on our revenue side”.


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