How Do We Expect Expedia’s Advertising And Media Segment To Grow And Why?
While Priceline strengthens its relationship with TripAdvisor’s Instant Booking, Expedia had been strengthening its own metasearch engine, Trivago. In 2015, Trivago’s standalone revenue stood at around €490 million, reflecting ~60% year-over-year growth and its adjusted EBITDA reached a few million euros. Trivago’s revenues grew by over $200 million in the second quarter and over $600 million on a trailing 12-month basis. Trivago is the primary driver to bolster Expedia’s revenues from the advertising and media segment and we currently expect the revenues to grow at a CAGR of ~11% between 2016 to 2023.
Currently Expedia and Trivago are exploring the possibility of an initial public offering which they aim to complete by the end of 2016. The IPO might give Trivago the credibility among investors as a standalone company, though Expedia doesn’t plan on selling off its 63% stake in Trivago. According to industry experts, Trivago’s adjusted EBITDA is expected to rise by 142% from around $64 million in 2016 to around $155 million by 2018. They also expect Trivago to attract a valuation of close to $6.5 billion for its IPO.
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