BELLEVUE, Wash. — The lobby of Expedia Inc.’s headquarters transformed into an airport runway in celebration of the company’s 20th anniversary Wednesday. Employees busily stuffed “travel kits” with toiletries for the homeless, as part of Expedia’s philanthropy initiatives, while others took photo booth pictures, and celebrated how far the company has come.
It has been two decades since Expedia was founded as a small division inside Microsoft. Twenty years later, the online travel company has more than 18,000 employees and $6.6 billion in annual revenue.
The travel giant has come a long way since its founding in 1996 as a division of Microsoft. Three years after Expedia launched, Bill Gates decided to spin the travel business off as its own public company. Rich Barton led the newly-independent business as CEO, before going on to found Zillow and Glassdoor.
“Of course I thought Expedia would be as successful as it is,” Barton told GeekWire via email this week. “Our initial BHAG (Big Hairy Audacious Goal) was to become the largest seller of travel in the world. In 1996, BusinessWeek quoted me saying we would meet that goal. That got me in trouble with my bosses at Microsoft – but I was right. While I believe BHAGs are somewhat self-fulfilling, as they attract big dreamers, accomplishing a goal like that is by no means easy. I’m incredibly proud of the Expedia Inc. team and what they have accomplished, and I look forward to another 20 years of innovation on behalf of the curious travelers and adventurers around the world.”
He added, “I’m incredibly proud of the Expedia Inc. team and what they have accomplished, and I look forward to another 20 years of innovation on behalf of the curious travelers and adventurers around the world.”
Expedia has been on an aggressive acquisition spree in the past five years, gobbling up brands including Travelocity, Trivago, Orbitz, and most recently HomeAway for $3.9 billion.
GeekWire asked CEO Dara Khosrowshahi if Expedia’s appetite for acquisitions has been sated.
“We’re never done,” he said. “I would say that we’re done for now. There’s a bunch of work that we’re doing with Orbitz, with HomeAway, etcetera, so I think that this year we’re going to be much more focused on organic internal growth. But when you look at a 10 or 20-year runway — and that’s certainly the runway that we’re looking at — and you look at the travel industry, which is a $1.4 trillion industry, there are going to be new players. There are going to be great new brands and there are going to be great ideas. Some of them are going to be ours and when some of them aren’t ours, we’ll look to buy them in and add them to the family.”
Acquisitions have been an integral part of Expedia’s business since the company launched 20 years ago. Both Khosrowshahi and Expedia Chief Financial Officer Mark Okestrom say that Expedia’s M&A success comes from a thoughtful and strategic approach.
“We’re a company that was built on acquisitions,” said Okestrom. “Yes our name is Expedia Inc. but Expedia.com, which was the original acquisition back in 2001, is just a piece of a much larger portfolio, so mergers and acquisitions is in our DNA.”
That was a reference to media mogul Barry Diller’s acquisition of a controlling stake in Expedia in 2001. Diller’s IAC spun off Expedia as a public company in 2005, but Diller remains Expedia’s chairman, and he is in Bellevue today for the celebration.
Despite its success in recent years, Expedia has experienced some turbulence during its journey. The company grew rapidly in its early years, making it difficult to innovate as competition in the travel space heated up.
“Our technology stacks suffered from the years and years of super growth, where we got slower,” said Khosrowshahi. “We weren’t innovating as much as we needed to. That brought us through a transitional period where we doubled down on our technology investment, reinvested, refactored all of the back-end that runs the company now and really led to a period of renewed growth.”
By investing in technology, Expedia was able to adapt to the mobile revolution. The Expedia app, Okerstrom says, has been a financial boon and the company is now designing products for mobile first, then backwards engineering them for desktop.
“We were started by the Internet,” said John Morrey, VP and GM of Expedia and Travelocity North America. “That created Expedia. Ten years later, mobile came in and really shook up the travel industry again. …. We’ve seen this industry be revolutionized twice based on changing consumer habits in the course of a little more than a decade. And that’s what really forced us to say we need to be prepared for whatever it is that the consumer landscape might bring. We really doubled down on technology coming out of that evolution to mobile.”
Expedia employees are celebrating today at the company’s Bellevue headquarters — but that won’t be their home forever. The company made headlines last year, announcing plans to buy the former Amgen campus on the Elliott Bay waterfront in Seattle. Expedia plans to begin relocation in 2019.
The move was controversial, as many Expedia employees currently live on the Eastside. Still, Khosrowshahi is confident the move will be a net win and will give the company a recruiting edge.
“We thought, ‘we have to have this,’” he said. “And we can build an amazing forever headquarters for this company within Seattle.”
The big move is just one of the changes on the horizon for Expedia. There are still more frontiers for the company to conquer in the world of travel. Expedia is acutely focused on developing its global footprint and building out its corporate travel business. The company is also preparing to launch a new rail booking product this year, likely testing in Europe before the United States, said Aman Bhutani, the president of Brand Expedia Group, in an interview today.
“We’ve really organized for speed,” Bhutani said. “We are moving faster and faster. As we grow bigger, we are always getting paranoid. Organizing the teams for speed is super-important.”