US travel site TripAdvisor hits market with thud

Spun off by parent Expedia, TripAdvisor shares dropped from their last other-the-counter price of $30.25 Tuesday to as low as $28.00 before rebounding to $28.70 in thin afternoon trade.

Expedia hived off the 11-year-old company and issued 123 million new shares to existing shareholders, giving TripAdvisor a market valuation of about $3.5 billion.

Operating websites in 29 countries, TripAdvisor makes money off of the travel advertising it packages with listings and mostly user-generated reviews of hotels, flights, vacation packages and other services.

The company says its sites pull in 44 million unique views a month, enhanced by links to users' accounts on social media websites like Facebook.

It also syndicates its content to 30,000 partner sites, such as hotels.

The company pulled in $486 million in revenues in 2010, 37 percent higher than the previous year, for net earnings of $139 million.

"We're doing all this with a great margin... we are extremely profitable," said president and chief executive Stephen Kaufer.

Kaufer said the listing will help the company build its business around the world, with a special eye on China, where it launched its own travel website and also bought a competing one.

"It's a very different market; we continue to invest heavily" in China, he said.

"There's a billion people. They're starting to travel domestically and internationally, and we intend to help those folks."

Parent company Expedia's shares were up 2.9 percent during the day.

(c) 2011 AFP