TripAdvisor’s Curious Strategy of Buying Smaller Startups
If TripAdvisor wants to gain competitive advantages, it needs to reconsider its historically conservative strategy of small, immaterial acquisitions and start looking at larger acquisitions.
As large travel booking giants like Priceline and Expedia continue to do big-ticket digital acquisitions, the hotel reviews giant — and now-trying-to-become-hotel-metasearch company — TripAdvisor continues with its curious strategy of picking up tiny travel companies that have little apparent effect on its topline, and surely nothing on its bottomline.
According to its latest quarterly SEC 10-Q filing, TripAdvisor acquired five companies in the first six months of this year for a total cash price of $31.6 million. These five startups were: TinyPost, Jetsetter, CruiseWise, Niumba, and GateGuru.
Out of these five companies, CruiseWise and TinyPost together cost a little over $1 million, more of the acqhire variety, and the rest — Jetsetter, Niumba, and GateGuru — had $30 million spread between them. Our estimate is Jetsetter took the largest chunk of that, which means the sale price of GateGuru and Niumba were likely in the single digit millions.