In its first earnings call as a public company, TripAdvisor revealed that a year-long redesign of its global websites in 2011 was a major contributing factor to slowed revenue growth as certain advertising elements were removed to improve the user experience.
The user review site, with 44 million monthly unique visitors and claims of being the largest network of travel sites in the world, saw its 2011 revenue rise 31% to $637.1 million, but that was off the 2010 pace. In that year, revenue climbed 47.6%.
Making what it deems to be necessary changes and investments despite the short-term impact was a theme that ran through the company's conference call with analysts February 8 despite the fact that Wall Street looks for growth and bottom-line results.
Steve Kaufer, TripAdvisor CEO, said he couldn't say whether or not in the future the company would take such steps as the redesign, which led to lower revenue per session.
And, TripAdvisor officials were adamant that it would increase investments in initiatives, including mobile and China, which currently are running at a loss.
There will be no slowing of TripAdvisor's investment in China and Daodao, which has been posting operating losses since it came into the TripAdvisor fold in 2009, and is projected to record operating losses in 2012, as well.
"There is little doubt that the opportunity there is large," Kaufer said, referring to China.
TripAdvisor provided lots of insights during its earnings call into its thinking about investments.
In fact, Kaufer said TripAdvisor has decided to invest in and emphasize mobile despite the fact that mobile traffic, to some extent, comes at the expense of desktop traffic.
As TripAdvisor benefits from its mobile offerings -- 13 million downloads compared with 12 million for Kayak's apps -- the user review site has made the conscious decision not to monetize mobile fully at this time, Kaufer said.
TripAdvisor also continues to invest in the social arena, particularly in Trip Friends on Facebook, and revealed that "TripAdvisor users who are also Facebook users are approximately 27% more engaged in TripAdvisor site usage and are twice as likely to contribute content that the average TripAdvsor user."
Some 85 million Facebook users have tried TripFriends, through the end of 2011, and they've received more than 1.5 billion travel "pins," TripAdvisor stated.
The company also disclosed another fascinating statistic about users' engagement with TripAdvisor -- they add 40 pieces of content (a user review, rating, photo or room tip etc.) per minute.
TripAdvisor's net income in the fourth quarter increased 18.8% to $22 million on revenue of $637.1 million, a 31% rise.
One element of the business, Business Listings, which didn't exist a couple of years ago, and "other" revenue accounted for 11% of the company's revenue in the fourth quarter. A year earlier the subscription business accounted for just 7% of revenue.
There were some interesting points made during the conference call about TripAdvisor database of 60 million reviews, which CFO Julie Bradley described as a "huge" barrier to entry for competitors.
When people talk about TripAdvisor transitioning to verified reviews, the 60 million reviews as a huge barrier to entry is one of the reasons the company is steadfastly staying with its review policy.
And, on the TripAdvisor user review front, the subject of the Advertising Standards Authority's adverse ruling in the UK did not garner a single mention by Kaufer, Bradley or analysts during the conference call.
If analysts were concerned about its impact, they didn't make that known.
Kaufer said the company's rate of review collection around the world "has really gone up substantially" over the last 12 years.
He projected that TripAdvisor would be on pace to add another 20 million reviews in 2012 even if the "run rate" of review collection doesn't increase.
Kaufer said he also looks to the company's burgeoning vacation rental business as a major growth opportunity.
And, Kaufer was somewhat dismissive of Google Places, which impinged TripAdvisor traffic coming from Google in 2010.
Kaufer said he's not worried about Google Places as a competitor because "they don't have the content," although he conceded that Google still has the potential of hurting TripAdvisor's traffic.
In TripAdvisor's view, those 60 million hotel reviews and climbing are a barrier to entry for Google, as well.