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question is, Would you rather read 20 reviews from people you don t know, or 1 review from Frommer s Near as I can tell, most people, when given the choice of only one piece of information, will take the Frommer s even though they might be suspicious it s a little old or a little vague. But when you have 10 or 20 reviews, and you have a half a dozen written in the past couple of weeks, you know you re getting an unvarnished and up-to-date version of what you re looking for. And colorful.
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Livingston: Were the people originally gathering all this content TripAdvisor employees, or were they contractors Kaufer: A combination. Livingston: You said it took a couple years to populate the site. Did you launch
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the site before it was fully populated
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Kaufer: Oh yeah. We started in February 2000, and in October 2000 we
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launched the site, but it only covered the United States. Over the course of the next 2 years, we rolled out the rest of the world geographically. Of course, we were always adding more and more content as we found it. When we launched, if you picked the 20th hotel in our popularity index in Boston, there might have been one or two articles about that hotel, which is a heck of a lot better than none, but nothing compared to what we have now.
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Livingston: How did people find TripAdvisor when you first launched Kaufer: When we started TripAdvisor, the notion was TripAdvisor.com was actually just going to be our demo site, because we never planned to appeal directly to end users. We were going to be selling this rich database to travel portals, online travel sites. They would be querying our database to find the best information and surfacing it to their users, and there would be a little Powered by TripAdvisor. Because we would have the richest database of travel information, our hope was that it would become a requirement that, if you were in the travel industry or offering a travel section of your site, you have access to our content. And we would license it out and/or get a share of the revenue generated on the page views from that. Lycos Travel, Yahoo Travel, AOL Travel, Expedia, Travelocity all the players would have to have it. No one would try to build it themselves, because we d always be able to stay ahead, since we were entirely focused on it. That would be our business model, and that s the model that got us some funding to begin with. After a year and a half, we had closed one licensing deal, with Lycos, where they were featuring our content on their travel portal, and we were getting a revenue share on what they made selling advertising on the pages that we produced for them. Everyone else basically wanted to be paid to feature our content, and we wanted to get paid to have our content featured. So there was a pretty big disconnect. Then it turned out that with the Lycos deal (even though Lycos was a major web property at the time), the joke was the quarterly revenue check wouldn t buy the weekly free lunch that we offered to our employees. We had a rather fundamental problem in half of the business. It was
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a typical dot-com business problem: built the product, people liked it, and the feedback was universally positive, and we got the expansion questions that we were happy to get, like When are you going to cover Paris but we just were not making a dime. By the middle of 2001, we were getting frustrated. Then September 11 came along, and anything we might have had in the pipeline not that I remember it being a particularly interesting pipeline was stalled, dead. It was a hugely traumatic time for everyone, especially for the travel industry. We were also trying to raise a third round of funding, and we were basically looking at going out of business in 6 to 9 months. It was a little hard to go back to the existing investors and say, Hey, pony up more money. We ve got a great product. We have no revenue, and we ve been trying to sell the stuff for a while. We have no takers. The one company that did license it is generating a couple hundred dollars a quarter for us. But really, toss in a couple more million, because it s a great idea. It was a tough pitch to make. We made it, and we actually did raise a small third round more, I think, from the perspective of Look, this is a good product. We ll figure this out. We were 11 people before September 11, and we slimmed down to 8, so our burn rate was really pretty small. Everyone took salary cuts; we were paying $18 a square foot for office space; we had really no expenses to speak of. We were stretching the dollars, and even though it was Internet dot-com days, we had never done anything remotely lavish. So we re approaching late 2001, and we noticed our demo site, TripAdvisor.com, had started to get some traffic. Just people finding it. We tried to be active in PR from day one, so we d gotten some mentions in various press. I m not entirely sure how people were finding it search engines, whatever. And we certainly weren t doing anything monetizing the traffic. We thought, OK, with 5,000 visitors a day, let s go run some banner ads, see if we can make some money that way. We tried running a banner ad. We didn t try to sell it; we just copied Expedia s banner ad and put it up on our site. We wanted to see how many people would click on it. We might have had 3,000 visitors that day and we might have generated 100 clicks, so maybe it would have been a couple of dollars to us. So that was just clearly not going to work. But one of our prospects a couple of months earlier had asked us whether or not we could run ads based upon the search query. If someone was searching on Boston, could we run an ad for Boston We explained, We don t run ads. That s not our model. We re trying to license you the content. But it struck us months later that we do have people that are qualifying themselves to be interested in Boston. In fact, we have people qualifying themselves to be interested in the Eliot Hotel in Boston, because they re reading a review about it. What if we created a link from TripAdvisor deep to an online travel site like Expedia and had teaser text that said, Book a room at the Eliot Hotel in Boston, and, if the user clicked on that link, we took them all the way down to the booking page on Expedia Our crawler technology knew how to do that, so it was leveraging something we were pretty good at.
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