Financial Analysis of Expedia

Expedia A Financial Analysis 1

Running Head : EXPEDIA A FINANCIAL ANALYSIS

The Financial Analysis of Expedia

Mel

. Schneider

University of Philadelphia

Dr . XYZ

Accounting 101 Expedia A Financial Analysis 2

Abstract

Planning your travel ? Visit Expedia . It 's hard to miss their much discounted prices for your travel needs . But have you wondered how they offer these prices and still retain their position as the no . 1 worldwide online travel agency , the third US travel company and the 4th worldwide travel company ? After this analysis , you

will be able to know how the company works as to how they engage their customers and attract investors and potential buyers . The provides intensive study when Expedia was still starting as subsidiary in another business and how it got its name in the travel world now

Expedia A Financial Analysis 3

The Financial Analysis of Expedia

Company 's History

Originally founded by Microsoft in 1995 , Expedia was the first travel agency established online by a large technological company . It was formerly part of the Microsoft Network (MSN ) while still on its developing stages but was released shortly by Microsoft as an independent online travel agency in 1999 , still maintaining controlling number of stocks . The first Expedia 's president and CEO was Richard Barton , who was responsible as well for the idea of selling travel online . It offers customers options to make flight , hotel and car reservations by then . As early as 1998 , it expanded its horizons to the United Kingdom which was a dead ringer of the original site

A breakthrough was made by Expedia on March 1997 , wherein it had reported bookings worth 1 million just in a period of 7 days , 80 of which is due to airline bookings . Eventually , Expedia 's website was upgraded on the same year . Features of which includes seat selection real-time basis flight information and a detailed directory of prepaid and postpaid hotels in different destinations . Expansions in Canada Germany , Australia , Netherlands , France , China and Norway followed shortly in the middle of 1999

In 2001 , USA Networks , Inc . bought majority of the stocks of Expedia and eventually became the owner in 2002 . Around November of 2002 , Expedia formally launch another feature , Expedia Corporate Travel , where companies can get discount for bulk fares and hotel reservations . Since then , Expedia had gained consistent increases in its revenues and profits

Right now , Expedia offers different travel services on its site which includes airfares

prepaid and postpaid hotels , cars , destination packages , cruises as well as ticket admissions

Expedia A Financial Analysis 4

to different popular travel destinations

Financial Statement Analysis

Expedia , Inc ( NASDAQ :EXPE

INCOME STATEMENT In Millions of USD (except for per share items ) 12 months Ending

2007-12-31 12 months Ending2006-12-31 12 months

Ending 2005-12-31 12 months Ending

2004-12-31

Revenue 2 ,665 .33 2 ,237 .59 2 ,119 .45 1 ,843 .01

Other Revenue br Cost of Revenue Gross Profit 2 ,102 .93 1 ,734 .95 1 ,648 .74 1 ,452 .69

Selling /General /Admin . Expenses , 1 ,013...