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.
Stephen Kaufer 365
We approached Expedia and said, “Hey, we’d like to advertise your 50,000
hotels on our comprehensive travel site, and we want to charge you only for the
leads that we’ll send you.” I explained how our leads were highly qualified.
“These are wonderful travelers, they’re reading reviews, and we’re going to do
lots of bookings for you, so we’d like you to advertise with us.” He said, “I’ve
never heard of you guys. Prove it.”
I can certainly understand why he’d never heard of us, because no one had.