Alan Pickerill Dara Khosrowshahi - Chief Executive Officer, President, Director and Member of Executive Committee Mark D. Okerstrom - Chief Financial Officer and Senior Vice President of Corporate Development

Brian Patrick Fitzgerald - Jefferies & Company, Inc., Research Division Ross Sandler - Deutsche Bank AG, Research Division Mark S. Mahaney - RBC Capital Markets, LLC, Research Division Naved Khan - Cantor Fitzgerald & Co., Research Division Thomas C. White - Macquarie Research Eric James Sheridan - UBS Investment Bank, Research Division Douglas Anmuth - JP Morgan Chase & Co, Research Division Michael Millman - Millman Research Associates Kenneth Sena - Evercore Partners Inc., Research Division Paul Bieber Kevin Kopelman - Cowen and Company, LLC, Research Division Michael B. Purcell - Stifel, Nicolaus & Co., Inc., Research Division

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Expedia, Inc. First Quarter 2013 Earnings Call [Operator Instructions] This conference is being recorded today, April 25, 2013. I would now like to turn the conference over to Alan Pickerill, Vice President of Investor Relations for Expedia. Please go ahead.

Thank you. Good afternoon, and welcome to Expedia, Inc.'s financial results conference call for the first quarter ended March 31, 2013. I'm pleased to be joined on the call today by Dara Khosrowshahi, Expedia's CEO and President; and Mark Okerstrom, our CFO. The following discussion, including responses to your questions, reflects management's views as of today, April 25, 2013, only. We do not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to today's press release and the company's filings with the SEC for information about factors, which could cause our actual results to differ materially from these forward-looking statements. You'll find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today on our earnings release, which is posted on the company's IR website at expediainc.com/ir. I encourage you to periodically visit our Investor Relations site for important content, including today's earnings release. Finally, unless otherwise stated, all references to cost of revenue, selling and marketing expense, general and administrative expense, and technology and content expense exclude stock-based compensation, and all comparisons on this call will be against our results for the comparable period of 2012. With that, let me turn the call over to Dara.

Thanks, Alan. After a solid year in 2012, we're off to a promising start in 2013. We continue to see healthy top line performance, driven primarily by hotel room night growth of 28%. Top line results have been solid for essentially all of our brands with the exception of Hotwire, which has seen its share of challenges. Mark will discuss these issues further in his remarks. We're also quite happy to officially welcome trivago into our family of leading travel brands with that deal closing in early March. Our key technology projects remain on track, and the teams continue to execute. We've successfully migrated significant Expedia package end-to-end traffic to our new platform with promising early results. We're also seeing progress in our Air UI path, which we've been testing for some time. Hotels.com has consistently been delivering terrific new features, and one in particular I'll call out is increased self-service capabilities on our sites. This is a true win-win. Our customers prefer online self-service, and we save money on our contact center costs. Across all of our brands, our pace of innovation, which we believe is a key ingredient for long-term success, is at an all-time high. Speaking of innovation, our Expedia Traveler Preference program is rolling out as expected, with nearly 25,000 hotels signed up and over half of those live in production. We've taken a look at performance metrics for a group of participating hotels in Europe and compared those metrics to the results prior to joining the program. For these hotels, we can see an improvement in room night growth well over 500 basis points for bookings where payment choice is enabled. As far as consumer preference, for ETP standalone room nights, we're seeing about a 50-50 split between Expedia Collect and Hotel Collect. All in, including packages and nonrefundable room nights, the mix is currently around 75% Expedia Collect, 25% Hotel Collect. Now these results are based on very early data and won't be the same for all hotels, but we believe that the hotels participating in the program will see better results than hotels that are not participating. I'd also like to reiterate a point we made previously that as ETP rolls out globally, we expect it will result in lower blended hotel revenue margins. Of course, we're also expecting the program to draw higher conversion and unit growth over time. The overall impact will depend in part on the pace of the rollout and the relative product and geographic mix. We continue to see progress in mobile, passing the 30 million global app download milestone across our major brands. The mobile channel is growing at an extremely fast pace, and the mobile booking mix continues to increase. While there's certainly risks in mobile as it evolves into a key channel, we're optimistic about our ability to grow and take share over time. We firmly believe that global players like Expedia, Inc. who are investing in great mobile functionality and design, driving the distribution and downloading of apps while sourcing great content in mobile-only deals for customers are most likely to succeed over the long term. Notably, we updated our brand Expedia app this quarter with a beautiful, new itinerary feature. Customers can see all of the components of their upcoming trips, whether it be the hotel room, the air ticket or the rental car. We believe we're one of the few to provide this kind of functionality to our customers and that our design is second to none. While we're satisfied with the solid start to the year, we're keenly aware that the competitive environment remains difficult and still have a lot of work to do. This is an execution game for us. We'll continue to invest appropriately in new technologies, new markets and new channels, and we're confident that as we execute on our plans, we'll create real value for all of our stakeholders, our customers, our investors, our employees and our supply partners. Mark? Mark D. Okerstrom: Thanks, Dara. Overall, we're pleased with our first quarter results. Hotel revenue grew 24%, driven by room night growth of 28%, which was offset slightly by a 3% decrease in revenue per room night. Domestic room nights were up 15% year-over-year, while international room nights were up 43%. Note that room night growth comparisons in Q1 were much more difficult than they were in Q4. Also remember that the first quarter last year was helped by an extra day from leap year, which was more or less offset by this year's earlier Easter. But note that the Easter comp will create a bit of a headwind for Q2. Our international business continues to thrive with gross bookings and revenue growth of 30% and 36%, respectively. Importantly, we closed our acquisition of trivago in early March, and we're happy to have that business and team as part of the Expedia, Inc. family. trivago is an early-stage business growing very quickly, and we expect them to push on the gas pedal for quite a while. With less than 1 month of trivago in our results, they added a little more than 150 basis points of global revenue growth for the quarter. At the brand level, we continue to see healthy results for most of our brands with the notable recent exception of Hotwire, which is being challenged by 3 key trends: Firstly, the Domestic Car business has become increasingly challenging, primarily due to continued fleet constraints and associated efforts by rental car companies to drive up pricing. This environment creates clear challenges for the Opaque deep discount car rental business. In addition, Hotwire is probably the most countercyclical brand we have, so as economies stabilize and hoteliers see higher occupancy rates, the gap between Opaque pricing and retail pricing for consumers narrows, and this business comes under increased pressure. And lastly, the competitive intensity in the Opaque space has heated up with Hotwire's closest competitor recently launching a very similar deep discount product. To the upside, Hotwire is seeing nice international growth, but that business is not yet large enough to move the needle. Revenue from our air business grew 14% year-over-year. Ticket volume increased 9%, again largely due to our VIA Travel acquisition. Revenue per ticket was up 5%, primarily on volume incentive compensation for certain carriers. Note that because we will lap the VIA acquisition at the end of April, we don't expect such positive air trends to continue. Other revenue grew 29% for the quarter, primarily on growth in corporate travel fees, insurance and hotel metasearch revenue of trivago. In contrast, rental car revenue was a headwind. Now turning to key expense categories. Cost of revenue grew slightly faster than revenue in the first quarter, primarily on the impact of our acquisitions. On an organic basis, cost of revenue would have leveraged. As we expected, selling and marketing expense grew faster than revenue, primarily due to difficult comps, our continued marketing efforts to support improved product performance across our Expedia and Hotels.com brands, as well as our aggressive expansion in key international markets. Selling and marketing expense growth was also further amplified this quarter as a result of the inclusion of trivago's results, which added almost 400 basis points to selling and marketing expense growth for the quarter. As a result, looking forward, we now expect selling and marketing expense to grow faster in Q2 than it did in Q1, and the organic comps will get easier in Q3 and Q4. Growth rates will continue to be high throughout the year as the trivago team continues to invest aggressively to expand their scale and global footprint. Technology and content grew 27% year-over-year on higher headcount cost driven by continued investments in our key technology projects and fast growth and depreciation expense. For the remainder of 2013, we expect depreciation to grow sequentially in a pattern very similar to what you've seen over the past several quarters. As a result, we expect tech and content expense to continue to grow at relatively high rates on a reported basis but start looking better relative to revenue growth on a cash basis later this year. General and administrative expenses grew 19% for the first quarter with 700 basis points of growth coming from acquired businesses. In terms of capital allocation, since our last call, in addition to our dividend, we deployed nearly $700 million towards a combination of acquisitions and buybacks, closing our trivago acquisition and repurchasing 2 million shares for $127 million, an average price of $63.60 per share. Before covering financial expectations, I'd like to briefly highlight certain housekeeping items. First, there are some additional impacts to our P&L that will be driven by our trivago acquisition. In the back half of the year and in the future, we expect to see a significant increase in the minority or noncontrolling interest line on our P&L to account for the 37% of trivago currently held by minority shareholders. While not applicable to adjusted EBITDA, this will impact net income and adjusted net income. We're also expecting interest income to be negatively impacted by the cash outlay for trivago. Please note that interest income will also be reduced by cash paid per share repurchases so far in 2013, along with the payments we expect to make to Hawaii. Second, you may have noticed that our GAAP and ANI tax rates were anomalous this quarter. The GAAP impact was driven in part by a couple of sizable, nondeductible expenses, while ANI rate was driven in part by some favorable tax impacts from recent U.S. tax legislation. Though quite difficult to predict, for full year, we are estimating the effective rate of about 25%. Turning to our financial expectations for full year 2013. We continue to expect adjusted EBITDA growth in the low double digits with the possibility of hitting the low teens. Note that we have added adjusted EBITDA for trivago to our forecast in the range of $20 million to $30 million. However, we have reduced our organic forecast by a similar amount due primarily to the challenges we are seeing at Hotwire. In terms of the shape of the year, we now expect all of our annual adjusted EBITDA dollar growth to come in the back half of the year. With that, let's turn to questions. Operator, would you please remind listeners how to ask a question.

[Operator Instructions] Our first question comes from the line of Brian Fitzgerald with Jefferies & Company. Brian Patrick Fitzgerald - Jefferies & Company, Inc., Research Division: With now over 25% of your global room nights under the agency model with ETP, have you seen better conversion there? And you highlighted that the drivers there are varied based on geography and mix, but what level do you think longer term you can get to on Hotel Collect?

Just to be specific, the 25% number is an overall agency number, and a significant amount of that agency number is eLong in China. So our ETP volumes aren't close to this 25% number. They're significantly lower than that, although they're going to be ramping up over a period of time as we launch more ETP hotels. And as we said, we've seen those ETP hotels perform better than non-ETP hotels. As far as the long term goes, so far, based on what we see, we are seeing around 50-50 percent volume between Hotel Collect and Expedia Collect, which would suggest 50% agency, 50% merchant. However, there is a significant amount of package inventory that we sell, prepaid inventory, that we sell as well. So based on the evidence that we see to date, we think that the agency portion of Expedia volume is going to be less than 50%. But it's very, very early. And I will tell you again that we're not focused on the percentage between agency collect and Expedia Collect. We want the best experience for our consumers. So we don't have an agenda here. The only agenda is to drive -- drive kind of consumer preference. We are seeing higher conversion. We're seeing higher average rates from ETP as well. We are seeing higher cancellation rates. So a lot of this has to work itself out, but we do think that ETP over long term is definitely going to be a positive for the company.

Our next question is from the line of Ross Sandler with Deutsche Bank. Ross Sandler - Deutsche Bank AG, Research Division: Just 2 questions. So first, on the guidance. Mark, you just said a $20 million to $30 million reduction in EBITDA for the core business x trivago from Hotwire weakness. That's not really a new trend. So is this something new that you're seeing early in the year? Or is this extra conservatism in that guidance? And then the second question for Dara, you stated recently that Expedia spends around $250 million per year on Google. And I think your largest competitor is closer to $800 million per year. Obviously, there's different geographic and product mix between the two of you but as you shift more money to Google, over the next few years, how do you think that will impact the overall ad efficiency at Expedia? Mark D. Okerstrom: All right. Ross, so with respect to Hotwire, there certainly was incremental weakness in Q1. And really, as you pointed out, the compression issues that we were seeing in Hotwire started with Superstorm Sandy, and what we were expecting to see is once that worked its way through the system, things would return to normal. And instead, what we saw, in large part due to the consolidation that's happened in the car rental space, is that the rental car companies essentially took the opportunity to keep capacity constrained and to push upgrades. And that was something that we certainly had no track record in forecasting because we have gone from many rental car companies to an amount that I can really count on one hand. And so it's just very difficult to call, and that did catch us by surprise. And I think secondly, the competitive intensity part has heated up with respect to Hotwire's primary competitor advertising their new product pretty heavily, and I think that had an impact that we were not anticipating to the degree that we saw. Now with respect to the full year impact, we are basically forecasting that business such that we don't see any material change from what we've seen today. We have no reason to believe that things will get better. So whether or not that's conservative, I don't know. I would say it's just prudent forecast on our part.

And then as far as our spend on Google, we don't specifically want to disclose how much we spent on various channels. I will say that we do believe that the Google channel is a significant opportunity for us. We have focused on that channel quite a bit across Hotels.com, Expedia and many of our brands. And in general, our spend and volume from Google has been increasing at a very significant rate on a year-on-year basis as we have improved our processes there, as our supply basis improved, as we've skilled [ph] up the group and also invested in technology and conversion. So that said, we have stated before that we do see our variable channels, Google is one of our variable channels growing, in general, faster than our other channels, especially in international emerging markets. We don't see that stopping anytime soon. Our efficiencies from variable channels in general are higher or they're less efficient than our direct channels. So we certainly do see some pressure on the marketing front as those variable channels grow very fast. We are seeing some encouraging signs that as we invest in those variable channels, more customers are coming to us directly, our repeat customer base is increasing as well, which is an offset to the margins -- to the margin pressure that I talked about. So really, the question is from a long-term standpoint, how were those 2 going to offset each other? But we do treat each channel separately. We look at each geography separately, and to the extent that the mix hurts our margins, that's not necessarily something that we care about as long as it's a good result. So we do view our Google volume increasing as being good result. And we do think that we will be able to offset some of that adverse marketing mix with leveraging our cost of sales line, leveraging our G&A from a long-term standpoint. So when I look at the whole P&L on a holistic basis, we believe that we're in a pretty good space.

Our next question is from the line of Mark Mahaney with RBC Capital Markets. Mark S. Mahaney - RBC Capital Markets, LLC, Research Division: Two questions, please. Dara, any comments on demand conditions in different geographic markets, and I guess particularly in Europe, anything that suggests stability, improvement, and deterioration? And then I don't know if you'd be willing to comment at all about the Google EU proposed solution settlement, whatever it is, and whether that would be good for companies like yourself? Any thoughts on whether that's beneficial to you?

Sure, Mark. As far as geos goes, nothing particularly different this quarter than the last quarter. We're pretty satisfied with our -- with our demand broadly, and we do see some weakness in Southern Europe. That's a trend that's been going on for some period of time, and we certainly haven't seen that change. But otherwise, it's business as usual for us. As far as the Google situation, we're just reviewing the proposed commitments. I'd say on a very preliminary basis, we don't think that the commission has gone far enough, and it looks like they're going to allow Google to kind of continue to use their dominant position, which we think, long term, is a bad thing for consumers. So we think that Google favoring their internal product over third-party results reduces choice, stifles innovation over a long term, and we think that's a bad thing for consumers. But again, that's based on a very, very preliminary look at the commission's findings so far.

The next question is from the line of Naved Khan with Cantor Fitzgerald. Naved Khan - Cantor Fitzgerald & Co., Research Division: Dara, can you talk about the competitive environment in the domestic market in the last quarter, particularly given the advertising push by Booking.com?

Sure. We aren't really seeing too many differences. Domestically, our room night growth has been very solid with 15%. And we are seeing Booking.com aggressive on the international front. We haven't necessarily seen that affect our businesses. We're quite happy with our growth rates, and we think that we continue to gain share domestically certainly in the overall lodging markets. We do see Booking.com engage in some behavior as far as their display, their price display goes, especially from markets outside of the U.S., where they really never showed the consumer ultimately what the consumer is going to pay, and we know that they've got the technology to do so. They never really display the full price, and we display full price for consumers, especially when they're going to run their credit card and they're going to click on the buy button. So we think that's an issue that we're looking at, and we'll take a look at how we respond to that. But otherwise, at this point, we're pretty happy with the domestic marketplace and the growth there, and we continue to take our competition, especially Booking.com, quite seriously. Naved Khan - Cantor Fitzgerald & Co., Research Division: Okay. And then quickly on trivago, do you plan to deploy it in more geographies now that you acquired it? I mean, more or less, can you just sketch out the plans that you have for this year and really just looking out a couple of years?

Yes, yes, definitely, we do expect to enter new geographies quite aggressively. trivago has been very successful expanding across Europe, and is both investing in and growing quite quickly across European geographies. The team there is very good at testing and learning the effect of both offline and online marketing in new geographies and very carefully test and learn into new geos. They are coming into the U.S., and they're seeing some encouraging numbers in the U.S. We're seeing some encouraging numbers in Canada as well, and they will continue to expand geographically quite aggressively. Our agenda for trivago is revenue growth first. And we think that there's a lot of potential there. It's just a terrific service and a terrific team.

The next question is from the line of Tom White with Macquarie. Thomas C. White - Macquarie Research: One on trivago. I was wondering if you could just talk a little bit about its traffic mix between paid and organic sources. Sounds like the addition of trivago for part of the quarter was a significant contributor to that ramp in sales and marketing spend. And then just secondarily on ETP, I was wondering if you could sort of characterize the types of hotels that are signing up? I saw Accor and La Quinta. Is it still mostly the larger chains? Should we expect that the smaller and sort of independent players will do it? Is it a question of resources for them? How should we think about that?

Sure. So trivago has a healthy mix of traffic across the channels. But really the distinguishing factor for them versus a traditional OTA is that they are very much about brand building and particularly television advertising. So they would skew disproportionately into direct type-in type traffic or branded traffic versus other players that would have a much broader mix. And they did have a big impact on our sales and marketing line this quarter, and that's something you'll continue to see certainly throughout the year. And I would remind you that we had about 23 days out of a total of 90 for the quarter of trivago in our results. So I would just take that into consideration. With respect to ETP, so far, the mix has been a lot of chains. I would say that on the chain side, it's probably about 1/2 chains, 1/2 independents. A lot of that is a result of the fact that you can just be a little bit more efficient with your discussions in chains. You can certainly sign up a lot more hotels with fewer conversations, and I wouldn't take that necessarily as a view on who likes it best. We feel pretty good about what we're seeing so far across chains and independents, and we're very pleased with the reaction. Our suppliers seem to like it, and the numbers we're seeing suggest that it's been great for those who have signed up, and we hope to see a very representative mix of our hotel partners signing up for this in increasing numbers as the year progresses. Mark D. Okerstrom: And I would say that our relationships with our chain partners are quite deep. We've invested pretty heavily in them, and they're quite sophisticated, both operationally and financially. And frankly, when they see some of the ETP numbers, they see the great results, and for the most part, are working with us quite aggressively.

Our next question is from the line of Eric Sheridan with UBS. Eric James Sheridan - UBS Investment Bank, Research Division: One question on revenue per night -- I'm sorry with the ADR growth. We got back to flat this quarter after sort of multiple quarters of it being down based on some of the issues you worked through last year. Can you just give us some sense of what you're seeing now on a going-forward basis with the trajectory on ADR growth?

Sure. Well, so far, I would say ADR growth in -- if you exclude Asia-Pacific, is pretty healthy, I think, across the markets that we're seeing. It should [ph] have been low single digits. The U.S. is certainly there. Europe would be a little bit lower. Across our business in Asia, of course, the numbers are down. And that's primarily a mix-driven issue for us more than anything.

Next question is from the line of Douglas Anmuth with JPMorgan. Douglas Anmuth - JP Morgan Chase & Co, Research Division: Dara, you talked about increasing your ad spend with Google pretty nicely and in search. But I just want to hear a little bit more just about how you're thinking about sort of your ROI in search, given the platform upgrades and your higher conversion rates, what's happening in general with your ROIs and then also where you are with the packages platform migration and the benefits you're seeing there.

Sure, Douglas. As far as search goes, our approach has been to keep our ROIs essentially constant and translate our conversion gains into higher volumes. So we definitely have a choice to make, which is we could translate our conversion gains into better efficiency and higher profitability. The other choice that you can make is to the extent you view -- you drive conversion is to increase your CPC bid at essentially the same efficiencies that you had in the past. And broadly, those are the -- that's the choice that we're making at this point. We are efficient in our search volumes. So typically, we don't go into a loss position, but we are translating our conversion gains into volume. At some point, we may change that, but at this point, we think it's the right strategic decision. And we are seeing some of those decisions result in better repeat rates, et cetera, for consumers, and we certainly see that as being a good trend. On the package platform migration, we are early. But the results are encouraging. We've launched on Expedia in the U.S. for some of our simpler packages: our package end-to-end product. It has resulted in higher conversions. And we are in the process of now rolling out that product on a worldwide basis. We will then expand. Right now, it's really for flight and hotels, the simplest form of packages, and then we'll get into more complex packages. So really the phase now is we've got it done. It works. It works well. We're going to expand it so that we get as many people using the product as possible. And then we'll get into our test and learn. And I think what we've seen with our hotel path is that while there is goodness in the initial flip over to the new platform, there's more goodness as you test and learn and as you experiment. And that's certainly something that we hope to see on the package side.

Your next question is from the line of Michael Millman with Millman Research Associates. Michael Millman - Millman Research Associates: While it's in its early days, can you talk about what you see with sequestration going forward, certainly getting a lot of press now, how it -- or if you're seeing anything currently? And regarding car rental, you said prices are up. And I think maybe you can quantify that. And why is that a bad thing? I would assume you just pass that through and your commission actually is helped by those prices.

Sure, Michael. As far as sequestration, it's really too soon to tell. It's only been a couple of days, and our results can be quite up and down on a daily basis. And at this point, we haven't seen any trends that are worth calling out. I will say that we hope that its resolved. There's no reason why American consumers shouldn't travel. We've made it hard enough. Let's not make it harder. So we very much support what our travel supply partners, their voice, and we hope that this does resolve itself because it's certainly not necessary to go on like this. As far as car goes, the higher prices are certainly not a bad thing. But they do affect their volume, especially on Hotwire, where we've got consumers who are quite price-sensitive. So what we see when car prices go up is typically, a lower percentage of our Hotwire car volumes go through the Opaque channel, which is on balance and more attractive channel to us. And we do see a reduction in volume, especially amongst the very price-sensitive consumer, and certainly the Hotwire consumer is a price-sensitive consumer. So the team is working through it. But it's definitely something that did affect us for the first quarter, and we're hoping that trends get a bit better on the balance of the year.

Our next question is from the Ken Sena with Evercore Partners. Kenneth Sena - Evercore Partners Inc., Research Division: So your mobile app download has been very strong, and now I just wanted to see if you could give us maybe a little bit more information on relative engagement, either to mobile web usage or just in terms of monetization relative to desktop?

Yes, in general, we're quite pleased with our mobile efforts. And I think there are 3 segments that we look at. One is mobile downloaded apps. Second is mobile handset volumes. And then the third is tablet. We are -- as a percentage of our total volume, our downloaded apps are increasing, and that's a good thing. We're investing significant dollar amounts in order to drive downloads. We passed the 30 million mark. We are continuing to grow at a rapid pace. An obvious benefit of our download is that after you pay for that consumer, to the extent that you've got an app that they engage in and they keep, they tend to come direct versus coming through other channels. And we are seeing that behavior, and we're encouraged by that behavior, which is why we're investing as aggressively in product and marketing on the download side. On the mobile web side, that business continues to grow, and we're really working hard on learning about more ways to attract consumers on mobile web and continuing to build responsive sites that work just as well for the handset or the tablet as they do on the desktop. We do think that we've got a conversion opportunity here in general. For example, our tablet conversion isn't quite as strong as the desktop conversion. And we think that as we make the sites more responsive, as we simplify the sites, we can drive conversion over tablet and tablet-like devices. So it's really about investment in product, like Expedia itinerary, and then it's really making all of our sites responsive as well.

The next question is from the line of Justin Post with Bank of America Merrill Lynch.

This is Paul Bieber for Justin. I guess related to the previous question, is there any reason to believe the margin deleverage could end at some point in the industry given the increasing mix of mobile and also international marketing -- international market maturity? And then a second question, can you comment on the degree to which macro ETP and then just better conversion rates are contributing to stronger room night growth?

Yes. I think on the deleverage, listen, we could end marketing deleverage tomorrow. Right, Paul? So these are investments that we are making in mobile and international markets. When we look at most of our international markets that are maturing on a stand-alone basis, margins do tend to improve as these markets mature. But it's really the mix of the markets that's causing some of the marketing deleverage. And because we're seeing the pattern of being able to mature these international markets, we think that as we continue over a long period of time, we should see strong revenue growth and we should see some of that deleverage ease. But at this point, the opportunity on the international side, the opportunity to bring in some of that variable volume is an opportunity that we think is worth taking near term. And we think we can grow that top line aggressively and grow bottom lines as well. And we think the balance at this point is a pretty good balance. As far as ETP and better conversion, the -- on ETP itself, I think that ETP volumes are still too small to be really affecting overall numbers. But as the year progresses and especially going into Q4 and going to next year, we do think that ETP volume is going to be material, and if the trends, the early trends, that we're seeing now hold, it should be a conversion positive and it should be a volume positive going to next year. Otherwise, a lot of the conversion strength that we're seeing comes from the good work of the Hotels.com team and Expedia teams on the technology side. We continue to improve the product, and we think that there's still continued opportunity to improve the product.

Your next question is from the line of Kevin Kopelman with Cowen and Company. Kevin Kopelman - Cowen and Company, LLC, Research Division: Just a quick question on mobile. Could you give us any update on what percentage of transactions are being driven through mobile devices?

That's not something that we disclose on a regular basis, Kevin. But you've seen the download numbers, and they're very healthy. And mobile, again, we think, is a great positive for us. Kevin Kopelman - Cowen and Company, LLC, Research Division: Sure. And just one other question, the ETP rollout. Do you have any sense of why such a high percentage of consumers continue to choose Expedia Collect even when they have the option to defer?

Sure. Well, listen, there's lots of reasons. I think we're -- I'll give you a couple of examples, but I think our overall approach is we're trying to remove friction for whatever reason. But some of the things we've seen, anecdotally, is as we have seen currencies devalue, people taking long booking window trips, want to lock in their trip to the U.S. now at current prices. So they're happier to prepay than to wait. That's one example. There are a group of consumers or a type of consumers who feel a lot more comfortable that they've actually got a room where they want to stay when they paid for it in advance. So there's a bunch of reasons why people want to pay now. There's a bunch of people -- reasons why they want to pay later. And we're in the business of just doing whatever our consumers would like to choose and making that easy for them and making it easier for them to find the right hotel.

And our next question is from the line of Michael Purcell with Stifel Nicholas. Michael B. Purcell - Stifel, Nicolaus & Co., Inc., Research Division: I was hoping we could move back to trivago for a second. When the purchase was made last fall, I believe the run rate was about $132 million of revs or so. And if I do my math here, I think you said 150 basis points of revenue contributed in the quarter, which you now call it low double digits, millions of revenue and about 400 basis points in expenses. So that's a little bit higher. So my first question is I was wondering if there was a negative impact to your consolidated EBITDA from trivago for the quarter. And then secondly, I was wondering if you can give us some kind of thought as how fast trivago is growing.

Sure. So for the quarter, the impact to EBITDA was immaterial. It is a pretty -- right now, anyway, it's a pretty back-end loaded business generally largely due to the growth they're driving. Again, they're very much an off-line advertising-driven business, and that's a business that spends pretty consistently and ahead of demand. So when you're in such a high-growth mode, it ultimately ends up with some decent back-end loading. In terms of growth rates, again, I don't want to update what we said prior, but it has been a business that has been able to double revenue every year for the last 4 years. At some point, the law of large numbers starts to kick in and growth rates have slowed. But it's a high-growth business. We're going to invest aggressively behind them, behind the team. We think it's a great product. It's getting great traction, and there's just tons of headroom for it to expand globally.

And I will turn it back to Alan Pickerill for any closing remarks.

Okay. Yes, thanks, everybody, for your interest in Expedia and for joining us on the call today. Dara, any closing remarks?

No, just thank you very much for joining us on the call. We're early in the year, but I think we're off to a solid start. So thank you to all the Expedia, Inc. employees and special welcome to the team trivago to the Expedia family. We look forward to talking to you next quarter.

Ladies and gentlemen, this concludes the Expedia Incorporated First Quarter 2013 Earnings Call. Should you like to listen to a replay of today's call, please dial 1 (800) 406-7325 or (303) 590-3030 with the access code of 4613367. AT&T would like to thank you for your participation. You may now disconnect.