Expedia or TripAdvisor? CEOs Dara Khosrowshahi of Expedia or Stephen Kaufer of TripAdvisor? Which company or CEO will be the new darling?
What's clear is that Expedia, the transaction-processor, is feeling some heat from the investment community as TripAdvisor, the media company, is poised to get spun-off and become a public company in a couple of weeks.
Expedia stated today that it intends to make presentations to investors in December, January and February -- and the overall message is that "Expedia is well-positioned to capture significant global growth opportunity" on its own.
The renewed push to investors comes as Citigroup this week downgraded Expedia shares from "buy" to "neutral," Zacks Investment Research lowered Expedia from "outperform" to "neutral," Barclays Capital retained an "equalweight" rating, and Bank of America kept a "neutral" rating, according to Localized USA.
Analyst Mark Mahaney of Citigroup sees competition from other online travel agencies and suppliers, foreign exchange exposure, and the economy possibly impacting consumer discretionary spending as investment risks in Expedia's shares.
For its part, a new Expedia investors presentation emphasizes its global leadership and ability to tap into online adoption, international growth opportunities, "rapid expansion" in its hotel business, technology investments, prowess in mobile and "powerful free cash flow generation" as competitive advantages.
For example, Expedia notes that it is "rapidly expanding in the fragmented hotel market" with 145,000 hotels in 200 countries in its fold compared with 170,000 for market-leader Priceline, 85,000 for Orbitz and 39,000 for Ctrip.
Expedia says its investments in analytics and a new technology platform will drive increased conversions.
The company is also emphasizing that it fields an "experienced leadership team with deep industry knowledge," although it fails to point out that its CFO, Mark Okerstrom, has been in the role for only a few weeks.
So, as things stand now, TripAdvisor, with its sexy and high-margin advertising business, is ready to take off and Expedia has to prove to investors that there is real money and growth potential in transactions i.e. selling travel.
In the third quarter of 2011, operating income before amortization for Expedia's leisure business grew 7% to $297 million compared with a 23% jump to $91 million for the smaller TripAdvisor.
When it comes to which of the two siblings, both of which will be controlled by Barry Diller, has the momentium, Expedia's investor presentations show it has something to prove.