TripAdvisor: The Travel Company That’s Really All About Data

2/8/10Follow @wroush

TripAdvisor, which was founded 10 years ago this month, is a study in paradoxes:

• The Newton, MA-based company’s family of travel-related websites attracts 35 million unique visitors each month, making it one of the most successful Web properties in the Boston area—yet few people even realize the company is headquartered in New England.

• TripAdvisor’s sites are all about helping consumers plan trips to far-away destinations—but the company’s founders and managers don’t consider themselves travel enthusiasts.

• InterActive Corporation acquired the startup in 2004 made it a unit of Seattle-based Expedia (which was later spun off as an independent company)—yet TripAdvisor operates almost autonomously and is still led by its founding CEO, Stephen Kaufer.

• TripAdvisor’s most valuable asset has long been the millions of hotel and restaurant reviews contributed by its users—yet it’s now branching into the one segment of the travel industry, air travel, where customer opinion (read: chronic dissatisfaction) seems to have little impact on ticket sales or airline operations.

To reconcile all these apparent contradictions, it turns out, you need to look at TripAdvisor’s history. It’s a very long one, at least in Internet years. Remember GeoCities, Excite, Go, Blue Mountain Arts, AltaVista, Snap, or Xoom? Neither do most other people—but they were all among the top 15 most-visited websites back in 2000, when TripAdvisor got its start.

TripAdvisor's hotel directory pageThe way Kaufer tells it, TripAdvisor began as a specialized search engine designed to help people locate first-hand reviews of travel destinations, but became a destination unto itself once the founders recognized the value of the reviews being written by its own users and figured out how to make money on them. Kaufer says the company was “a couple of months shy of going out of business” in late 2001 when it finally discovered that it could collect handsome fees whenever readers clicked through to hotels or other businesses to make reservations. That’s still the main source of its revenue today.

Almost since it started, then, TripAdvisor has been a lead-generation engine more than anything else: it attracts visitors with its huge collection of user-generated reviews, then funnels them to travel-industry sites to complete their transactions. “Think of it as a glorious Yellow Pages filled with all the information you might like to find about where you’re going, with contact information, candid photos, and reviews,” Kaufer says.

That means the company’s main challenge has always been building and maintaining a highly scalable website with a very fast back end and … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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