TripAdvisor tipped for takeover (if it has a successful year)
TripAdvisor could find itself as a viable acquisition target if its financial results this week point to an upturn in its fortunes and strategy.
Financial analysts claim the company is “starting to see the light at the end of the tunnel” after a series of low-key earnings reports in the last year or so.
It is most recent, in November last year, TripAdvisor saw revenues increase by a slim 1% year-on-year to $21 million for the third quarter, with EBITDA down 12% to $114 million over the same period.
The central issue has been the ongoing integration and expansion of its Instant Booking model, whereby users can search and select a hotel on metasearch principles but secure the reservation on-site.
This has had a detrimental impact on its until recently mostly solid financial performance since listing on the public markets.
But since then, Expedia has come onboard with the initiative alongside Booking.com, and Hilton – one of the naysayers for a few years – has also joined.
This is giving the beancounters on Wall Street some reason for optimism over the business, with it touted as a decent vehicle for investors.
Furthermore, Jonathon Ansley, John Freeman and Fred McClimans, in a report on SeekingAlpha, claim the TripAdvisor business could be a potential target for deep-pocketed suitors. TRIP has a market cap of around $7.5 billion.
Still, none of the likely buyers is particularly surprising.
One could come in the form of the Priceline Group – a deal that has been talked about for years and gains prominence every time Glenn Fogel (ex-M&A guru and now CEO) is seen talking to Steve Kaufer at a Phocuswright conference.
Others potential buyers could be Google, the SeekingAlpha analyst report says, or Amazon.
The former has possibly the most obvious legs to it of the trio of acquirers, given the synergies around content and hotel metasearch, whilst an Amazon deal could be seen as its attempt to finally figure out how to tackle the travel industry (after a few lacklustre attempts).
Kevin is senior editor and a co-founder at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.
He has worked in regional newspapers (Essex Enquirer) and started his career at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and publishes his first book - a biography about Depeche Mode - in early-2017.