TripAdvisor’s first earnings reports, released last week, showed 2011 revenue of $637 million, a 31 percent jump over the previous year, and net income of $177 million, a 28 percent increase.
But Wall Street was not pleased.
Weaker profit numbers than expected by analysts, coupled with increased spending on marketing and TripAdvisor’s projection of slower revenue growth, pushed the stock price down 15 percent in one day, to $30.04.
“From a short-term perspective, we are disappointing some,’’ said Stephen Kaufer, cofounder and chief executive.
Yet he defended the company’s actions, saying TripAdvisor increased advertising spending in markets such as China and Brazil, where it is banking on growth.
It currently has websites that operate in 30 countries and in 21 languages.
But as TripAdvisor grows, so does Google Inc., the giant Internet service that in preparation for entering the online travel sector purchased ITA Software Inc., of Cambridge, for $700 million in 2010.
Google recently launched a flight tool that uses airline search technology it acquired from ITA. In a challenge to TripAdvisor, it also launched a hotel search engine and has more of its users writing travel reviews on its Google Places site.
“Google is certainly not going to make life easier for [TripAdvisor],’’ said Henry Harteveldt , a travel analyst with Atmosphere Research Group in San Francisco. “Google is entering into more and more travel places, but Google is approaching it from the standpoint of technology, and hoping people use it.’’
A Google spokesman said its travel services are an extension of its search functions. “Whenever people come to Google looking for travel information, our goal is to show them the most relevant results as quickly as possible,’’ he said.
Kaufer appears ready to fight. “If they can predict what consumers want better than I,’’ he said, “then they deserve to win.’’
