Expedia Flies After Q2, Pushed By Ad-Driven Tailwinds

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expediaAnalysts’ high expectations for Expedia’s Q2 2014 earnings were justified when the travel-booking company reported YoY revenue growth of 24% to $1.49 billion.

Though driven predominately by strong hotel room night and air ticket growth, Q2 advertising and media revenue played a notable role in causing the revenue hike, growing 54% YoY to $123 million. Read the earnings release.

Expedia’s acquisition of a 62% majority stake (for $632 million) in German travel metasearch engine Trivago and its promotion of Expedia Media Solutions drove the most ad revenue.

“Trivago is aggressively pushing into parts of the world where they’re very strong and Expedia is perhaps underpenetrated,” CEO Dara Khosrowshahi said. CFO Mark Okerstrom noted that Trivago generates good leads and is an important traffic acquisition channel for travel advertisers. However, he expects to see deceleration during the back half of 2014.

Expedia is also focusing heavily on mobile expansion. Khosrowshahi said the company has “excellent traction,” especially with downloads on iOS devices. Next up: Android donwloads, which trail iOS downloads.

“One of the muscles we have to work out and flex is how to drive Android downloads in general,” Khosrowshahi said, adding the company’s app, across Expedia brands, has 150 million downloads.

Expedia is continuing to optimize its websites on mobile, a process still in its early stages. Thus, mobile conversion rates and length of stay trail their desktop counterparts. “We’re working very hard to build conversion,” Khosrowshahi said.

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