
Expedia Acquires Airbnb Rival HomeAway for $3.9B - bsmith
http://techcrunch.com/2015/11/04/expedia-acquires-airbnb-rival-homeaway-for-3-9b/
======
jasonwilk
This is an interesting deal. There was an article posted on HN a while ago
that talked about investors pouring money into publicly traded companies who
directly compete with private tech companies who have insanely high
valuations.

[http://www.nytimes.com/2015/08/10/technology/investors-
find-...](http://www.nytimes.com/2015/08/10/technology/investors-find-ways-to-
indirectly-profit-from-valuable-start-
ups.html?hpw&rref=technology&action=click&pgtype=Homepage&module=well-
region&region=bottom-well&WT.nav=bottom-well&_r=1)

HomeAway Vs AirBnB was specifically mentioned. Turned out well for the guys
who made this particular bet.

~~~
breitling
Time to invest in Lyft :)

~~~
fireworks10
Lyft is not publicly traded.

~~~
7Figures2Commas
GSV Capital (ticker: GSVC) is an investor in Lyft. As of June 30, its
investment in Lyft represented 2.9% of its portfolio.

Alibaba (ticker: BABA), Rakuten (which is listed on the Tokyo exchange) and
Tencent (which is listed on the Hong Kong exchange) are also investors in
Lyft.

I believe GSV Capital participated in Lyft's Series D, while the others were
Series E investors.

------
damon_c
Based on a recent experience, Homeaway's search for properties available
between two dates is pretty much a non-working facade.

The UI is all there... but after after entering credit card info etc. and
attempting to book several different places, only to then receive emails
stating that they were not available on those dates despite showing up in
search as being available, and "please call us directly because maybe we have
something else..."

It felt like shopping for NYC apartments on Craig's List... "we don't have the
one you want but what about this one?"

~~~
greggman
This is no different than AirBnB and infact AirBnB is worse IMO.

AirBnB has "instant booking" for like 10% of listing but for all the rest you
click "request to book" and you've instantly committed to giving the host 24
hours to respond. If they respond in the positive you're booked. In other
words, once you pick one place you're on the hook for it. You can't go looking
for other places just incase the host says their place is not available.

Worse, the UX has 2 buttons "Request to Book" and "Contact Host". THEY DO THE
SAME THING!!!! If you click "Contact Host" it will just send a booking
request. The host can charge your credit card even though you only clicked
"Contact". How do I know? It just happened to me

~~~
siquick
This isn't quite true.

Contact Host allows you to send an enquiry to the host and is in no way a
booking request. You should always do this before committing to a booking to
ensure the place is actually available.

Request to Book commits you to a booking and your card is charged there and
then, regardless of if the host accepts your request. It then takes up to 7
days to get your money back if the host declines - pretty frustrating.

Instant Book means the host can't decline your booking without their search
ranking score being negatively affected.

~~~
greggman
I used "Contact Host" and was still booked. Steps

    
    
        1) Enter dates
        2) Pick Place
        3) Pick "Contact Host"
        4) Host says place is as available
        5) Get message from AirBnB saying I've been approved by host
        6) Get message from AirBnB saying host has charged my card
    

At no time did I pick "Request a Booking". I thought it would stop at #5 and
I'd have to then login to AirBnB to finalize the details but no, the host was
able to do that without me even though I never picked "Request a Booking"

~~~
jthnme
Between 4/5 the host pre-approves you for booking (without you requesting to
book) that should be the case.

Have been using AirBnB for stays since 2012 and hosting since 2014. Never had
an un-requested booking.

\+ Host does not have a way to charge you

~~~
greggman
I've used AirBnB 18 times in the last 2.5 years. It happened. Give me your
credit card. I'll go through the process and see if I can get you booked. I'll
video all of it.

Or if you're from AirBnB, give me a fake account and all make it happen again.
If you think this is how it works I'm telling you there's a bug in your system

------
rdl
I wonder if they were waiting on SF.CA.US Prop F to announce or finalize.

~~~
pavornyoh
I think that is the case :). If so, very strategic and well played by Expedia.

~~~
toephu2
how so? It wouldn't have had any effect on Prop F passing or not and would not
affect the price Expedia is paying for HomeAway since this deal was probably
in the works for months.

~~~
sosborn
It is more about gauging public sentiment. If Prop F passed Expedia would have
been wise to reconsider the deal. The last thing you want to do is spend all
that money into an industry headed for heavy regulation that was voted in by
citizens.

~~~
toephu2
You act like prop F was a national proposition or somehow international, this
was just one city. Even if prop F passed it would not bring airbnb down as
they operate in 34k+ cities around the world. Expedia is also targeting the
int'l market. I doubt they would reconsider just over SF.

------
chrisacky
HomeAway has been positioning themselves to be bought by Expedia for about
12-20 months.

If you are in the travel industry you'd not actually think this news is a
suprise.

The timing is also 3 days after the close of the VRMA (a large travel
exhibition for vacation rental managers this year held in New Orleans)

I had the severe misfortune of going to last years VRMA. I travelled over from
England... anyway, the VRMA (which is suposed to be a somewhat neutral
organization looking after managers best interests) decided in their infinite
wisdom to give the spotlight to HomeAway's COO (Brent) and CEO (Brian).

The keynotes speech shocked everyone!.. Essentially, Brian Sharples turned an
event that was suposed to be generic advice for the betterment of the entire
industry into a marketing pitch about HomeAway and it's vision for the future.
This wasn't abstract advice.. this was specific details about how managers
will use HomeAway in the future. This was the KEYNOTE of an event that 800
managers paid several thousand dollars to attend.

Anyway, he told all managers that within 24 months they will be on "Instant
Book". This is a shock because the transition to Instant Book signalled that
they are trying to phase out the listing model.. (The listing model has always
been in favour of managers because it meant that they can handle their own
enquiries and bookings/payments). Pushing people down the instant book route
has always visibly been because they need the numbers to be attractive to
Expedia and because after increasing the listing modules from $300 to over
$1000 per listing (this is for platinum) they need more ways to increase
shareholder value.

PS. On return back to England, the forums and community boards were in uproar
about this. Our company paid to get the recordings of the event.. guess which
speach out of 48 different lectures and presentations were missing... the
keynote by Brian Sharples.

It's actually obscene that we were paying over $100k per year to HomeAway for
platinum listings and then users on a basic listing were being ranked higher
than us because they had "Book in Now" enabled on their properties. This is
all because transparently, they need the bookings to be processed through
their system to prove they are a valuable purchase for Expedia. (It's been no
secret that everyone has known it's going to be Expedia buying HA).

Further proof/conjecture(?), is that for a long time they stopped providing us
emails of enquiries made for our properties through their system. This is as
they assure the community because of "phising" fears etc...

I've long said, the best thing that can happen to the industry is for Expedia
to buy HomeAway. I think this is going to be a really good thing. Expedia is
going to force book it now, which isn't practical for managers who can't
handle the instant bookings (due to real time availability and calendars
issues).

Bit of a rant. I've never hidden my criticism of HomeAway. They've always been
the gorilla in the room who force you to play by their rules and demand
control of the entire booking process. (Keep in mind that they are long before
AirBnb. They might not be as glamourous, but HomeAway and VRBO have done
amazing things for the short term rental travel industry.... which can't be
forgotten.)

~~~
xur17
This is very interesting, especially the part about the keynote. That said, I
disagree with this point:

> It's actually obscene that we were paying over $100k per year to HomeAway
> for platinum listings and then users on a basic listing were being ranked
> higher than us because they had "Book in Now" enabled on their properties.
> This is all because transparently, they need the bookings to be processed
> through their system to prove they are a valuable purchase for Expedia.
> (It's been no secret that everyone has known it's going to be Expedia buying
> HA).

Having used HomeAway / VRBO before, this seems like the sensible approach.
Instant booking provides a much better experience for the user - I don't want
to have to email a bunch of places to determine which are available. They
definitely should be ranking these higher than other listings.

~~~
Dylan16807
If you want those ranked higher, fine, but they're basically lying to the
people that buy preferred listing. At that price level it's disgusting.

~~~
hawkice
Indeed, that's a lot of money to spend for no benefit. If you let people pay
to adjust search order it's always a conflict of interest, though. It's just
that in this case, they preferred the little customer (who pays for the
bookings) instead of the big customer.

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mcintyre1994
I used ownersdirect, a subsidiary of homeaway to book a villa for a holiday -
it was fantastic but the experience on their website was poor. It looks like
the homeaway site itself is much closer to the airbnb experience though -
messaging on site instead of by email, payments on site instead of through
PayPal.

They seem to charge to make listings though, and to rank listings at least in
the first case by how much you paid (subscription level) and to feature
listings solely for paying more. I expect airbnb has much better sorting by
not having that kind of pay to come up top/be featured mess.

[https://www.homeaway.co.uk/info/tipsandtools/subscription-
le...](https://www.homeaway.co.uk/info/tipsandtools/subscription-levels)

"Your subscription level is the most important factor you can control to
appear higher in search results and therefore improve your performance."
[https://www.homeaway.co.uk/info/tipsandtools/rank-
higher](https://www.homeaway.co.uk/info/tipsandtools/rank-higher)

------
kevinbluer
Does anyone have thoughts on the impact (positive or negative) the acquisition
will on the Austin tech scene, given this is where HomeAway is headquartered?

~~~
ereyes01
If Expedia keeps the company/team intact (which it sounds like it will in the
news story), I don't think very much will change in Austin as a result.
Homeaway is typically touted as one of the Austin unicorns, and now I guess
they will go down in lore as one more success story.

------
suyash
Sold it for way less than what it could have become.

~~~
adventured
That's an interesting question. Growth has been modest the last few years, and
has slowed to a crawl in 2015.

They've never made much money, with relatively slim operating income margins.

Yet they managed to sell for 300 times 2014 earnings (with the first two
quarters of 2015 being negative on net income). That's an extraordinary
multiple to say the least.

They managed to sell themselves for what they might have potentially been
worth ten years from now, if you priced them similar to how the market prices
Expedia or Priceline. That's assuming the competition doesn't gradually erode
them of course.

------
VOYD
How is something no one has ever heard of worth $3.9b?

~~~
samwiseg
You've never heard of HomeAway? They and VRBO (which they own) are the 2nd and
3rd biggest players in the home sharing economy, after Airbnb.

~~~
turar
FWIW, I've had consistently better experience with HomeAway/VRBO than with
AirBnB

~~~
gniv
Same here. For things like vacation houses, VRBO has been much better. I feel
that there is a lot of high-end inventory there. Plus, house owners are
familiar with the site, so they stick with it, even if the experience is not
great. There's untapped potential on VRBO.

