Expedia Inc.EXPE

Morningstar Rating

Stock Research and Analysis

by Warren Miller

Expedia offers a commodity product in a price-competitive industry. However, its scale in the online travel market has led to network effects that give the company advantages over competitors, resulting in a narrow economic moat.

Because online travel Read more

Bulls Say

Expedia's broad travel inventory helps its Web sites get more visitors than its competitors. This fuels highly profitable online advertising revenue.

Expedia's international growth is more profitable than its North American business because it can negotiate better premiums with the more fragmented supplier base in Europe and Asia.

In tough economic times, Expedia can get access to better inventory as hotels, airlines, and so on get desperate to maintain capacity utilization and become willing to sell outside their own sales channels. Read more

Bears Say

Ease of entry to the online travel market could significantly increase the amount of competition Expedia faces in the coming years.

Online travel is becoming increasingly competitive, and meta-search companies with travel aggregation technology may prevent Expedia from selling inventory as effectively as it otherwise could.

Expedia has seen slower growth abroad than Priceline. While Expedia's share of the overseas market is still bigger, it will slowly erode if the company can't pick up the pace. Read more

Strategy

Expedia enjoys the benefits of being the largest online travel agent and plans to protect its top spot. The company is expanding internationally into markets where suppliers are more fragmented in an Read more

Management

Dara Khosrowshahi has been the CEO of Expedia since it spun off from InterActiveCorp IACI in 2004. Before that, Khosrowshahi served in several executive level positions in InterActiveCorp's travel division. We believe Expedia's executive management Read more

Profile

Expedia is the largest online travel company that provides booking services for hotel rooms, airline tickets, rental cars, cruises, and other vacation packages. The company Read more

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