Expedia bounces after Cowen defends; Priceline higher, TripAdvisor off

Cowen argues the unnatural link penalty imposed by Google on Expedia's (EXPE -4.5%) placement within Google search results is likely to be resolved within a few weeks, and unlikely to have a major impact on the online travel site's results.

Though shares are still down sharply on the day, Cowen's note has helped Expedia bounce off its intraday low of $65.14.

Both Expedia and archrival Priceline (PCLN +0.9%) depend heavily on Google-related traffic, and have been ramping their Google ad spend to grab a larger share of it. Priceline spent $533.2M on online ad spend in Q3 (+42% Y/Y), and Expedia spent $625.3M (+24%) on sales/marketing in total.

TripAdvisor (TRIP -2.6%), which acts as a major referral traffic source for Expedia, is following Expedia lower.

Comments (1)
  • Internet Expert
    , contributor
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    I am not sure you clearly understand what a Google penalty can do to a business like Expedia.


    Overstock (OSTK), for example, stated that a Google penalty in 2012 caused them to lose 5% of their sales (http://bit.ly/LC4p9b). However, most saw this as an under-statement as they later blamed the Google penalty for their poor earnings reported in March 2012 (http://bit.ly/LC4oSI).


    Search for any related query, on a desktop or mobile phone, they now have ZERO page 1 rankings.
    21 Jan 2014, 02:33 PM Reply Like
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