Profiting from developments in

search engine technology

Adrian Currie
CFO Priceline Europe

CONFIDENTIAL INFORMATION • Property of priceline.com incorporated. All Right Reserved. 11/23/2005 page 1
Priceline Europe

1. A top online hotel booking company

2. Market-beating growth rates
3. Excellent supply coverage
4. Translated & localised content
5. Extensive distribution network
6. Leading guest experience
7. Supplier friendly model
8. Great place to work
9. …

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Market Beating Growth Rates
International Gross Bookings
$200,000,000

$150,000,000

$100,000,000

$50,000,000

$0
Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05

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Market Recognition for European Business

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Industry Pioneer to …

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… to Industry Leader

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 Controlling PPC Budgets
Strategy & Goals
• Business Strategy v PPC (alignment, “partnership” by channel)
• Financial Parameters (budget, ROI, etc)
• Bidding Strategies (yield optimisation)
Monitoring & Reporting
• Impressions, Clicks (CTR), Costs (CPC), Conversion, Revenues & ROI
• By Account, By Campaign, By Location, By Keyword, …
• Real-Time (available but assess over longer period)
Execution
• Analytical Approach: Positioning (CPC), Promotion (CTR) & Messaging
• Consumer Focused: Landing Pages, Translated Content & Best Product
• Talented People but Team Effort with Regular Communication

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Sustainability of distribution models?
Search Engines Branded Partners

Other Partners Own Sites

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 Fragmented Supply (and Demand)

100
90
80
70
60
(% )

50
40
30
20
10
0
US UK Europe Italy France
Hotel chains Independent hotels

Source: Euromonitor , Travel and Tourism in Western Europe page 15

No Real Rate Parity

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Ratings (and Price) are Important

18

16

14

12

10 Total
Frequent leisure
8 Occasional leisure

0
Rating level

No. Reviews

"Convenience
Familiarity
Pictures

Choice

Description
Speed
Price

options"

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Adding Value as an Intermediary

• Widest choice (coverage, ratings, experience, etc)

• Exceptional user experience (simple, design, etc)
• Great technology (algorithm, search, etc)
• Best rates & availability (benchmarking, guarantees, etc)
• Guest generated content (scores, reviews, etc)
• Special offers (deals, promotion, emails, etc)
• Supporting promotion (offline, online, emails, etc)
• Offering alternate channels
• Quality customer service processes
• Loyal customers (right hotel/right price, VFM, etc)
• …

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More and more localisation important

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Conclusion: How do we see SEO v PPC
SEARCH ENGINE OPTIMISATION
• Highly competitive
• Execution skills critical
• Lower “free” cost of sales
• Higher overhead cost
• Less qualified lead? Less recognition?
• Greater sustainability risk
• Effective and profitable (but risky) sales
channel
OWN BRANDED
Highly Competitive
Execution skills critical
No “?” cost of sales
Effective and most profitable channel
PAY PER CLICK MARKETING
• Highly competitive
• Execution skills critical
• Higher “expensive” cost of sales
• Lower overhead cost
• More qualified lead? More recognition?
• Significant sustainability threat
• Effective and profitable (but competitive)
sales channel
Highest overhead cost
Highly qualified lead (more loyal)
Less sustainability risk
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