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

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an intuitive, easy-to-navigate front end. Which means, in turn, that it’s full of people who were hired based on their engineering smarts, not their affinity for travel.

“We’re a fairly data-driven company—we’re always looking for ways to automate or improve something through algorithms,” says Adam Medros, TripAdvisor’s vice president of product. Both of Kaufer’s companies prior to TripAdvisor sold programming tools, a sector that “couldn’t have been further from travel,” Medros points out. So the evolution of TripAdvisor, he says, is “not necessarily an avid-traveler story but more of a problem-meets-solution type of story.”

Candid Camera

The original problem, in this case, was that Kaufer and his wife wanted to plan a Caribbean vacation. “I popped online to check out three resorts the travel agency had recommended, and darned if I didn’t find plenty of sites that talked about these resorts,” Kaufer told me in an interview last month. “But unfortunately they all said the same thing—the same boilerplate descriptions with the exact same photos. It wasn’t until I found a posting on an AOL member’s personal home page, with some candid photos and a very candid description of one of the resorts, that I realized this place was not what the brochure said it was going to be. We went elsewhere and had a great time, but my wife said, ‘Golly, there’s got to be a better way to do travel research on the Internet.’”

So TripAdvisor was born, in the form of a travel search engine. “We were taking the opposite approach from Google, which was at the time trying to surface search results that were highly authoritative,” Kaufer says. True to its search engine roots, the company simply provided links, then sent visitors off to other sites to read the reviews: “I wanted to surface the results buried on the back edges of the Web—just one person’s opinion about something.”

So it was perhaps to be expected, looking back, that the startup had trouble getting traction. “We had a site that we liked but we hadn’t figured out how to make money,” Kaufer says.

But during the winter of 2001, he says, the company made a discovery: when it displayed relevant text ads next to its search results, click-through rates for those ads were much higher—about 15 percent, as opposed to industry averages closer to 0.2 percent. If a TripAdvisor visitor was looking at a search result page for the Westin Indianapolis, for example, he’d be far more likely to click on a text ad reading “Book a room on Expedia” than if … Next Page »

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

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