The Board of Directors at Expedia (owned by InterActiveCorp or IAC) have just approved a plan to separate Expedia into two publicly traded companies:

  • TripAdvisor, which will include the domestic and international operations associated with the TripAdvisor Media Group (this includes its flagship brand as well as 18 other travel media and advertising brands); and
  • Expedia, Inc., which will continue to include the domestic and international operations of the company’s travel transaction brands (this includes Expedia.com, Hotels.com, eLong, Hotwire, Egencia, Expedia Affiliate Network, CruiseShipCenters, Venere, Classic Vacations and carrentals.com.

TripAdvisor was founded in February 2000 by Stephen Kaufer (current CEO), Langley Steinert, Thomas Palka and Nick Shanny. They raised their first $4M in 2000, signed Expedia.com as a client for their ad targeting technology in 2002, and sold to online property conglomerate IAC (which owned Expedia) just four years later for over $200 million. A year later TripAdvisor was included in the 2005 spin-out of Expedia (too many spinouts), and today the company employs over 500 people and enjoys 36 million monthly visits across a portfolio of travel brands.

This announcement is a great opportunity for TripAdvisor to swing for the fences, as it appears that IAC thinks they can be a BIG business on their own.

As far as terms go, this is taken from the release: “It is anticipated that the transaction will take the form of a distribution of stock of TripAdvisor to Expedia stockholders or a reclassification of Expedia stock, with the holders of Expedia stock receiving a proportionate amount of TripAdvisor stock, in either case in a tax free transaction.  It is expected that Expedia’s dual-class equity capital structure and the governance arrangements between Barry Diller and Liberty Media will be mirrored at TripAdvisor following the transaction.”

Clearly 2011 has been a big year for TripAdvisor. Coming off from announcing new Facebook integration the end of December, the company acquired a mobile travel offering (EveryTrail) in February and added 3D virtual tours to its iPad app. We look forward to covering more announcements by the company.

Want to learn more about TripAdvisor’s early days and path to success? We consider them part of Boston’s Tech-Mafia, and invite you to read up: “Boston Tech-Mafia Mondays: TripAdvisor – Pioneers in Online Travel.“

You can read more stories on Boston startups, technology and innovation at https://www.bizjournals.com/boston/inno