<SEC-DOCUMENT>0001193125-14-184980.txt : 20150126
<SEC-HEADER>0001193125-14-184980.hdr.sgml : 20150126
<ACCEPTANCE-DATETIME>20140506163134
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-14-184980
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20140506

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TripAdvisor, Inc.
		CENTRAL INDEX KEY:			0001526520
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
		IRS NUMBER:				800743202
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		141 NEEDHAM STREET
		CITY:			NEWTON
		STATE:			MA
		ZIP:			02464
		BUSINESS PHONE:		617-670-6300

	MAIL ADDRESS:	
		STREET 1:		141 NEEDHAM STREET
		CITY:			NEWTON
		STATE:			MA
		ZIP:			02464
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Michael J. Minahan</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">617.570.1021</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">mminahan</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">@goodwinprocter.com</P></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Goodwin Procter <SMALL>LLP</SMALL></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Counsellors
at Law</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Exchange Place</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Boston, MA 02109</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">T: 617.570.1000</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">F: 617.523.1231</P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May&nbsp;6, 2014 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States
Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549-4561 </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attn: Stephen Krikorian, Accounting Branch Chief </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>TripAdvisor, Inc. </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Form 10-K for the Fiscal Year Ended December&nbsp;31, 2013 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Filed February&nbsp;11, 2014 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>File No.&nbsp;001-35362 </B></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This letter is being furnished on behalf of TripAdvisor, Inc. (the &#147;<U>Company</U>&#148;) in response to comments contained in the letter
dated April&nbsp;8, 2014 (the &#147;<U>Letter</U>&#148;) from Stephen Krikorian of the Staff (the &#147;<U>Staff</U>&#148;) of the U.S. Securities and Exchange Commission (the &#147;<U>Commission</U>&#148;) to Julie M.B. Bradley, Chief Financial
Officer of the Company, with respect to the Company&#146;s Annual Report on Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2013 (File No.&nbsp;001-35362) that was filed with the Commission on
February&nbsp;11, 2014 (the &#147;<U>2013 Form 10-K</U>&#148;). The responses set forth below have been organized in the same manner in which the Commission&#146;s comments were organized. The responses provided herein are based upon information
provided to Goodwin Procter LLP by the Company. Copies of this letter are being sent under separate cover to Laura Veator and Barbara C. Jacobs of the Commission. The Company has acknowledged to us that it is responsible for the accuracy and
adequacy of the disclosures made in the Form 10-K and it has authorized this firm to respond to the Letter as follows: </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Item&nbsp;7. Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Revenue, page 45 </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Comment No. 1 </U></I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>We note that your revenue per
hotel shopper for fiscal year 2013 declined, in part, due to lower user conversion associated with the transition to hotel metasearch and other factors. Please tell us whether the reduction in user conversion presents a trend or uncertainty that has
had, or that you reasonably expect will have, a material impact on your business. Please also tell us what consideration you have given to disclosing qualitative and quantitative information regarding the user conversion rate and its change from
period to period. Refer to Item&nbsp;303(a)(3)(ii) of Regulation S-K and Section III.A of SEC Release 33-8350. </I></P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attn: Stephen Krikorian </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May 6, 2014 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
 2
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>RESPONSE: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In the Quarterly Report on Form 10-Q for the three months ended September&nbsp;30, 2013 and the 2013 Form 10-K, we identified the decline in
revenue per hotel shopper as a material trend based on our reasonable expectation that this trend would continue to have a material impact on our business. As described in the 2013 Form 10-K, the reason for the decline in revenue per hotel shopper
was the result of several factors, including (i)&nbsp;our recent transition to hotel metasearch, (ii)&nbsp;the growth in hotel shoppers on smartphones, which have a lower monetization rate than desktops and tablets, and (iii)&nbsp;the growth in
emerging international markets, which are currently monetizing at lower levels than our mature markets. Our transition to hotel metasearch, which was introduced to improve the user experience, has caused a significant and persistent shift to new
levels of user conversion, which is a measure of how many hotel shoppers ultimately click on a link that generates revenue for us. However, we do not believe there is a reasonable likelihood of the recurrence of such a shift in future periods.
Therefore, we determined that a quantification of user conversion, and the comparison of a user conversion rate in a period in which hotel metasearch was utilized to a user conversion rate in a historic period that preceded the transition to hotel
metasearch, would not provide meaningful information to an investor. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In addition, we described in our Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations, user conversion is merely one component of revenue per hotel shopper, which is one driver of our click-based revenue stream, and there are other factors impacting revenue generally and
click- based revenue in particular. These factors and their influence over revenue continue to evolve as we implement new strategies and develop new revenue generating activities. As a result, we believe that disclosing detailed qualitative and
quantitative information regarding the user conversion rate and its change from period to period, would place too much emphasis on this one component of one source of revenue and could potentially be misleading given the lack of a direct correlation
between user conversion rates and revenue per hotel shopper. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Furthermore, we believe that following the completion of the metasearch
transition period, the user conversion rates with hotel metasearch will stabilize and cease to have as meaningful an impact on revenue per hotel shopper. For example, in the first quarter of 2014, despite a decline in user conversion during that
period in comparison to the first quarter of 2013, we are seeing an increase in revenue per hotel shopper due to the inherent improvements in cost-per-click pricing, or CPC pricing, associated with the online travel agency, (&#147;OTA&#148;),
bidding process that underlies the hotel metasearch business model. If we determine that this is not the case, and that trends in user conversion are material to an investor&#146;s understanding of long-term trends in revenue per hotel shopper, we
will reconsider our disclosure. Currently, we continue to </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attn: Stephen Krikorian </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May 6, 2014 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
 3
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
focus our efforts, and our disclosure, on strategies that will increase revenue per hotel shopper, including, but not limited to: improved strategies to further monetize on our mobile platform as
our number of mobile visitors continues to grow, and the increased maturity of our OTA bidding process in emerging international markets. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Comment
No.&nbsp;2 </U></I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>We note from your disclosure on page 16 that CPC pricing for click-based advertising is based, in part, on competition between
advertisers. Your disclosure on page 47 also explains how the change in CPC pricing paid by Expedia during fiscal years 2011 to 2013 had an impact on revenue during these years. Please tell us how the CPC pricing paid by other advertisers, including
Priceline, has changed, if at all, over the past three years and whether any price change has had a material impact on your revenues during that time. See Item&nbsp;303(a)(3)(iii) of Regulation S-K. </I></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>RESPONSE: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As a result of the spin-off
from Expedia in December 2011, we had expected Expedia to lower its CPC pricing by 10-15% beginning in the fourth quarter of 2011, as noted in each of our Annual Reports on Form 10-K for the periods ended December&nbsp;31, 2011 and December&nbsp;31,
2012, and therefore continued to provide more detailed disclosure related to pricing for Expedia in our 2013 Form 10-K. However, we respectfully inform the Staff that in fiscal years 2011 and 2012, CPC pricing paid by advertisers other than Expedia
did not fluctuate materially and did not have a material impact on our revenues. Furthermore, while there was an average increase in CPC pricing in fiscal year 2013 that contributed to our revenues, this increase was generally consistent across all
of our advertisers. The key driver of this increase was related to the implementation of hotel metasearch which we completed in June 2013. Our metasearch capabilities allowed us to deliver higher quality clicks to our customers, including Expedia
and Priceline; as a result, our customers are willing to bid and pay higher prices for this traffic. Our customers, including OTAs, that participate in the bidding process, determine the CPC pricing paid. The amount they are willing to bid for any
particular property can be be affected by a variety of factors, such as customer bid optimization and initiatives to expand their reach or achieve other strategic outcomes. As a result, any material pricing trends are difficult to predict. Further,
our form of advertising agreement, which we have entered into with Priceline and our other OTA customers and recently entered into with Expedia, does not contain terms related to pricing; as stated above, the prices paid by our customers are
determined in the bidding process. As a result, we are not currently contemplating any additional disclosure, but are continually evaluating our disclosure and intend to provide additional information to the extent trends are known and determined to
be material to an investor&#146;s understanding of our business. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">United States Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attn: Stephen Krikorian </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May 6, 2014 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"> Page
 4
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Comment No.&nbsp;3 </U></I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>You state that for the fiscal year 2013, your two most significant advertising customers, Expedia and Priceline (and their subsidiaries), each accounted for
more than 10% of your total revenue and combined accounted for 47% of total revenue. Of this percentage, Expedia comprised 23% while Priceline comprised 24%. Prior fiscal years show similar concentration with these customers. Please advise of the
consideration given to filing your advertising agreements with these entities or incorporating by reference these agreements. In this regard, we note that a master advertising agreement (CPC) with Expedia was filed in an 8-K filed in December 2011
and amended in March 2012; while this 8-K and amendment were incorporated by reference into your fiscal year 2012 10-K, they were not incorporated into your fiscal year 2013 10-K. Further, we believe that the material terms of your advertising
agreements with Expedia and Priceline should be set forth in future filings. </I></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>RESPONSE: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Master Advertising Agreement (CPC) with Expedia filed in the Current Report on Form 8-K in December 2011 and amended March 2012, has been
terminated and is no longer in effect. Instead, we have entered into our standard form of advertising agreement with Expedia, which is the same form of advertising agreement we have entered into with Priceline and our other OTA customers. As
described above, our advertising agreements do not contain pricing terms, as pricing is determined pursuant to the OTA bidding process, but do contain terms related to payment mechanics, advertising criteria and other general provisions. This form
of agreement was filed as Exhibit 10.21 to our 2013 Form 10-K, and in the future, as per the Staff&#146;s comment, the Company plans to include a summary description of the terms of this agreement in its annual reports on Form 10-K. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;* </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">If you require additional information, please telephone the undersigned at (617)&nbsp;570-1021. </P>
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<TD VALIGN="top">Sincerely,</TD></TR>
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<TD VALIGN="top">/s/ Michael J. Minahan, Esq.</TD></TR>
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<TD VALIGN="top">Michael J. Minahan, Esq.</TD></TR>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top">Julie M.B. Bradley, Chief Financial Officer, <I>TripAdvisor, Inc.</I> </TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Seth Kalvert, SVP and General Counsel, <I>TripAdvisor, Inc.</I> </TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Linda C. Frazier, VP and Associate General Counsel, <I>TripAdvisor, Inc.</I> </TD></TR></TABLE>
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