Interview: Expedia and HomeAway CEOs Talk Acquisition, Mistakes and Opportunities

Expedia Inc. CEO Dara Khosrowshahi says his company's $3.9 billion acquisition of HomeAway makes good on a mistake he made when Expedia spun off TripAdvisor in 2011: He allowed Expedia's acquisitions of vacation rental sites such as FlipKey in the U.S. and Holiday Lettings in the UK to get away with TripAdvisor's exit. In a Skift phone interview with Khosrowshahi and HomeAway CEO Brian Sharples from Austin, Texas [see a full transcript of the interview embedded below], some three hours after they announced that their companies were joining forces, Khosrowshahi said Expedia had been trying to build a competitor to HomeAway at the time but was "insanely jealous" of HomeAway's supply, "the businesses Brian was bringing under HomeAway's umbrella," and was "pretty frustrated at the speed and the execution of the HomeAway team." "So I'm making up for that mistake now," Khosrowshahi said. Asked whether acquiring HomeAway saves Expedia years in trying to ramp up vacation rental supply on its own or through partnerships, Khosrowshahi said Expedia wouldn't have been able build up the depth of HomeAway's supply and that the acquisition accelerates Expedia Inc.'s path to adding alternative lodging such as vacation rentals. Giving travelers the choice of hotels, vacation rentals and even urban apartments, which Expedia is working on, increases Expedia Inc.'s addressable market, Khosrowshahi said. HomeAway entered into a distribution partnership a couple of years ago, but it was slow-going as far as giving the vacation rental site high-profile real estate/displays on Expedia.com. Khosrowshahi said that now that HomeAway would become "part of the family" and 100 percent of HomeAway's revenue would be benefiting Expedia Inc. this means that Expedia can more aggressively integrate HomeAway's listings. He declined to detail the origins of the acquisition talks. The Competitive Landscape Plans call for HomeAway's vacation rentals to appear on Expedia.com, Hotels.com, Travelocity, Orbitz and other Expedia brands. In turn, Expedia's apartment listings in urban areas, which are not a current HomeAway strength, will show up in HomeAway's global brands. Expedia Inc. has been on an acquisition tear, having acquired Wotif, Travelocity, Orbitz Worldwide, Expedia's AirAsia joint venture and now HomeAway since 2014. Khosrowshahi and HomeAway's Sharples, however, said they didn't expect any antitrust issues related to the acquisition, although they will o