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

Thomas C. White - Macquarie Research Mark S. Mahaney - RBC Capital Markets, LLC, Research Division Naved Khan - Cantor Fitzgerald & Co., Research Division Bo Nam - JP Morgan Chase & Co, Research Division Eric James Sheridan - UBS Investment Bank, Research Division Ross Sandler - Deutsche Bank AG, Research Division Brian Patrick Fitzgerald - Jefferies LLC, Research Division Kenneth Sena - Evercore Partners Inc., Research Division Michael Millman - Millman Research Associates Brian Nowak - Susquehanna Financial Group, LLLP, Research Division Paul Judd Bieber - BofA Merrill Lynch, Research Division Andrew Marok - Cowen and Company, LLC, Research Division Dean Prissman - Crédit Suisse AG, Research Division Nishant Verma - Morgan Stanley, Research Division Andrew D. Connor - Piper Jaffray Companies, Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the Expedia Third Quarter 2013 Earnings Call. [Operator Instructions] This conference is being recorded today, October 30, 2013. I would now like to turn the conference over to Alan Pickerill. Please go ahead, sir.

Thank you, Douglas. Good afternoon, and welcome to Expedia Inc.'s financial results conference call for the third quarter ended September 30, 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, October 30, 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 in 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. We're pleased to deliver a strong Q3, showing solid top line and bottom line trends and setting us for a good finish to the year. I'd like to update you on the status of the challenges we discussed last quarter, and then cover a couple of other developments before turning the call over to Mark. First, for Hotwire, although revenue and profitability are still down, the trends have generally stabilized. The team now has a strong handle on both the challenges and opportunities, and they're mobilizing to build up the Hotwire brand and products to position the business for future growth. The TripAdvisor channel has generally improved since the initial global transition to metasearch during the second quarter. Although we see the performance in this channel vary week-by-week and also by geography, our bidding models are improving and we're generally regaining click share. It will still take some time for this to settle out, but we're confident about our ability to compete effectively in the metasearch channel in general. Lastly, while the U.S. markets remain extremely competitive, we've seen some improvements in our direct type-in channel. There's still work to do here, but we're cautiously optimistic given the recent trends. Brand Expedia performance continues to be robust, and we're pleased with our agreement to power Travelocity's U.S. and Canadian sites, including providing the underlying supply across product lines, along with the related customer service. We believe that this is a strong testament to the technology investment that we made over the past several years, and to our strong global supply footprint. The Travelocity team will be responsible for driving traffic through various marketing channels, and our brands will be competing with them for that traffic. The implementation work commenced, essentially, the moment the agreement was signed and continues as we speak. As the capabilities are completed, we will begin to transition traffic, test the results and scale up over time. It's still early in this implementation, but we're happy with our progress thus far, and expect to launch in the first half of 2014. eLong and trivago continue to execute well. eLong is growing in the highly competitive Chinese market with a real focus on and strong acceleration in the mobile channel. We're also pleased with trivago results in Q3, with continued strong revenue growth on an aggressive global expansion. We expect trivago to be nicely profitable for 2013 and expect more of the same playbook next year, steep selling and marketing investments made in the front half of the year and profits delivered in the back half. trivago's terrific product and branding campaigns have earned it the right of being the most recognized hotel metasearch brand in Europe, and we're eager to continue introducing trivago to the rest of the world. In closing, we feel better about our recent trends after a difficult first half of the year. We fully expect continued competition around the world, but we've demonstrated an ability to adjust and execute in an attractive, dynamic and highly competitive space. Our core online travel agency business is transitioning from a deep investment phase into one where we can grow in scale, while at the same time, we continue to invest in earlier-stage businesses like Egencia, eLong and trivago, where the focus is more on top line growth and share gains than on near-term profits. We continue to believe we have a long runway of growth ahead of us in this huge market, and consistent with that belief, we've continued our stock buyback program, including the repurchase of 6 million shares since the beginning of the third quarter. With that, let me turn it over to Mark. Mark D. Okerstrom: Thanks, Dara. Overall revenue growth of 17% came mostly from Brand Expedia, trivago and Hotels.com, with all our major brands growing at healthy rates year-over-year, with the exception of Hotwire. The challenges at Hotwire remain, but since the time of our last call, we have seen relative stability for this brand. Overall, our hotel business continues to drive our performance, and we had solid room night growth this quarter at 20% year-over-year. Domestic room nights were up 12%, and international room nights grew 28%, both similar to second quarter growth rates on more difficult comps. This growth was partially offset by a decline in revenue per room night of 7%, a trend that we have seen for a while. Pressure on revenue per room night comes from a variety of factors, including mix shifts to Asia, growth from our chain hotel partners and growth in our loyalty programs, along with various forms of discounting and couponing. In addition, as we continue to expand the breadth and depth of our global hotel offering and continue to roll out Expedia Traveler Preference, we have made and expect to continue to make adjustments to our economics in various geographies, including changes based upon local market conditions. Based on all of these dynamics, as we look forward, we expect revenue per room night to continue to decline. As we have said before, given the size of the global opportunity ahead of us, we will continue to trade unit economics for greater volume growth over the long term. ETP is now in full swing, with more than 35,000 hotels under contract and 90% of those hotels live in production. Please remember that ETP gives the customer the opportunity to choose whether they want to pay us in advance or pay at the hotel. Based on recent room night data for ETP-participating hotels on Brand Expedia and Hotels.com, production is coming in at around a 50-50 split between Expedia Collect and Hotel Collect, including package, nonrefundable and other room night productions for these hotels across our portfolio of brands that makes us roughly 25% Hotel Collect. We expect travelers to continue choosing both options and as such, expect to see meaningful merchant and agency bookings in the future. Advertising and media revenue also grew substantially, mostly due to the inorganic growth from trivago, which represented approximately 6 percentage points of our total revenue growth for the quarter. From an expense perspective, we are pleased that every expense item, with the exception of direct sales and marketing, leveraged versus revenue. Of particular note, tech and content expense grew 14% in the third quarter, representing the third consecutive quarter of deceleration and the slowest growth rate in more than 2 years. Selling and marketing grew faster than revenue, largely as a result of the addition of trivago and our aggressive global expansion efforts there. trivago added approximately 12 percentage points of growth to our selling and marketing expense. Additionally, cost of revenue and general and administrative expenses grew slower than revenue, all leading to nicely growing adjusted EBITDA, up 16% year-over-year to $340 million. Although we still have strong seasonality in our business, which will continue to impact the shape of our P&L from quarter to quarter, we are happy to be able to show visible progress towards our target P&L. In terms of capital allocation, year-to-date, we deployed over $1 billion towards a combination of acquisitions, share repurchases, including the 8 million shares we have repurchased year-to-date, as well as our dividend. Turning to our financial expectations, we told you last quarter that we expected full year adjusted EBITDA to grow in the mid- to high-single-digit range, with efforts to do better than that. Including the impact of the costs associated with our Travelocity implementation, we remain on course to deliver against that guidance. Regarding Travelocity, from a financial perspective, it is difficult at this time to get too precise because there are a lot of variables at hand. We don't know the specific timing of the full launch. We can't yet gauge customer reaction and don't know what the specific conversion rates of the new sites will be. And of course, we are dependent on Travelocity's marketing efforts to drive traffic to the new sites. Having said that, our base case assumes that, once live, with 100% of the traffic moved over, this agreement can generate as much as $40 million to $65 million of incremental adjusted EBITDA for Expedia on an annual run-rate basis. As usual, we plan to give our 2014 guidance on our Q4 call, and we'll build in our expectations for the Travelocity contribution at that time. From a housekeeping perspective, we expect to account for the Travelocity agreement similar to how we account for other affiliate deals. We will report 100% of the gross bookings, revenue and room nights generated by the sites, and record the payment to Travelocity as a component of selling and marketing expense. With that, let's move to Q&A. Operator, will you please remind participants how to queue up for questions?

[Operator Instructions] And our first question is from the line of Tom White with Macquarie. Thomas C. White - Macquarie Research: So room night growth accelerated just slightly relative to last quarter. Can you talk a bit about some of the movements in the various channels you called out last quarter, such as TripAdvisor and direct navigations? Did the some of those improve and others deteriorate, or were things kind of sort of steady across everything? And then just quickly on revenue per room night, any kind of color you can give us about what sort of delta we should expect between kind of ADRs and revenue per room night kind of over the next, I don't know, call it, 4 to 8 quarters or so?

Sure, absolutely. As far as the room night growth went, I'd say that the theme this quarter was relative stability. We did see some improvement in the TripAdvisor channel. The TripAdvisor channel got better as the quarter progressed. And then obviously, we had a tougher comp as far as Q3 of last year versus Q2 of last year. So those 2 kind of offset each other. But in general, we're happy with the room night growth. And as far as the balance of top and bottom line growth as part of [ph] -- Mark, do you want to talk about revenue per room night? Mark D. Okerstrom: Sure. Again, the big drivers of revenue per room night, you've got mix shift to Asia, a lot of which ends up being driven by eLong. You've got the rollout of Expedia Traveler Preference program. You've got mix shift to chains, discounting, coupons, et cetera. All of those things combined over the course of the last several quarters, with a few exceptions, has led to a gap of around 6% to 7%-ish. We're expecting that revenue per room night will continue to decline, so I would just model that in. It's tough for us to predict the exact amount, but some of the trends you've seen recently are certainly directionally in the range of what we might expect, with probably a little bit more pressure to the downside than the upside.

And your next question is from the line of Mark Mahaney with RBC Capital Markets. Mark S. Mahaney - RBC Capital Markets, LLC, Research Division: I wonder if you could talk a little bit more about the metasearch transition at TripAdvisor. Based on their disclosures, it didn't seem like you materially changed your spend with them quarter-to-quarter, but you clearly had very strong results here. I guess the twofold question is, how long do you expect this transition to impact you? How long do you think it will take you for a while to work through that? And has it been material, the fact that you've materially cut back on your spend with TripAdvisor, and yet you're able to post these kind of nice growth metrics this quarter?

Yes, Mark, I think on TripAdvisor, the spend over the period, so to speak, Q3 versus Q2, was fairly comparable. We are -- I'd say the trend for us through the quarter was positive. So my expectation is that the Q3 -- the Q4 spend on TripAdvisor is going to improve over what you saw in Q2 and Q3. And that's just part of our optimization efforts on trip in general is testing and learning, understanding how the meta model works. And I'd say we are incrementally more confident with TripAdvisor meta and kind of more comfortable with the various parts of -- moving parts of that business than we were going into Q2. So we feel better about it, and we're certainly hoping that our Q4 spend in TripAdvisor will be up year-on-year.

The next question is from the line of Naved Khan with Cantor Fitzgerald. Naved Khan - Cantor Fitzgerald & Co., Research Division: So if I look at your bookings, the agency bookings seems to have accelerated. And also, the agency revenues show a nice acceleration. Is that mainly because of ETP, or are there some other factors contributing to that? And then I have a follow-up.

Sure. When you look at things at the bookings level, the air business can have a pretty significant impact, and that's a lot of what you saw this quarter. ETP is a contributor, but we saw nice growth in the air business, both on ATPs, as well as unit volume. A lot of that was driven by Brand Expedia, which has rolled out its new air platform and continues to test and learn. We're also seeing good performance in Egencia North America. That's really getting great traction in this market as people sort of modernize their approach to corporate travel. You've got one more? Naved Khan - Cantor Fitzgerald & Co., Research Division: And then -- yes, I did. So Dara, you talked about some improvement in direct type-ins and direct traffic. How sustainable is that going forward?

Naved, it's tough to tell. The direct channels are the ones that I would say are least responsive, at least on a short-term basis, to spend. So we have a pretty good idea when we're up or down on SEM or meta, because often it is directly related to our own activity or competitive activity. That is not quite true with the direct channel. So it's tougher to tell. We would guess that the competitive activity going into Q3 was a little bit less competitive, but as far as brand spend goes, our share of voice is where we want it to be. In general, we have gotten a bit more effective on variable channels, both on the Hotels.com and Expedia fronts, and that could have a kind of, call it, rebound effect on the direct channels. So those could be 2 factors, but again, our ability to be very specific on the direct channels is a bit more difficult.

Next question is from the line of Douglas Anmuth with JPMorgan. Bo Nam - JP Morgan Chase & Co, Research Division: This is Bo on for Doug. Can you talk a little bit about much of your bookings you're seeing for mobile and if you're seeing any shift? Previously, I think mobile generally accounted for a lot of the near-term, maybe next 24-hour bookings. If you're seeing any shift away from that, and if there's any difference between tablets and smartphones?

As far as our -- the percentage of mobile, mobile is basically one of our fastest-growing channels and continues to be growing very quickly, high-double digits, sometimes triple digits. We are seeing a very, very fast growth in mobile in Asia. eLong has been focusing on mobile very aggressively. Mobile downloads across EI are now approaching 80 million downloads. And we're attacking that channel aggressively across both apps, which tend to attract customers who are loyal to the brand, who then come directly second and third times, and then on web as well. One of the areas we're quite focused on right now is responsive design and building out sites that are able to respond based on whatever device that you use. And for example, the Expedia -- Brand Expedia hotel path now is fully responsive, and we're looking to move other paths responsive as well. So mobile for us is, we feel, a very, very big opportunity, and we're quite pleased with our progress there. Bo Nam - JP Morgan Chase & Co, Research Division: Could I ask just a quick follow-up to that also? Do you see any difference between air and hotels on mobile?

For us, hotels, because it is our largest revenue generator, is the first product that, in general, we have been rolling out on mobile. So our mobile penetration is the highest in hotels. Hotels.com has done a great job going mobile early, et cetera. On Expedia, we did introduce the air path on our app relatively recently. It's also available on mobile web as well. We think it's industry-leading experience, so we're seeing great early results. But air is very, very early right now. Mark D. Okerstrom: And then just on your question on booking patterns and shifts between tablets and smartphones, no significant shift. We continue to see smartphone bookings to be much nearer in and tablet bookings to look a lot more like desktop. The exception to that would be in Asia, where we actually see smartphone activity look a little bit more like desktop, as folks in the Asian market seem to be using that as their primary booking tool.

Next question is from the line of Eric Sheridan with UBS. Eric James Sheridan - UBS Investment Bank, Research Division: Two questions. Dara, now that you guys have been working and operating with the trivago business since the close, you mentioned -- talked about next year growth, the marketing expense to support that growth. What is your vision for longer term for how that asset fits inside the broader Expedia platform, maybe thinking out sort of longer term? And then second, on ETP, is there any sense you can give us of how -- where ETP has been deployed and adopted, what it might have done to sort of hotel room night growth or sort of bending the curve on revenue for the company?

Yes, as far as trivago goes, we try not to think too hard about these things. Our approach is going to be similar to our approach with TripAdvisor. We obviously a created a lot of value with TripAdvisor, and our shareholders at the time of the spinout are quite happy about that. As you know, TripAdvisor was operated fairly independently from the OTA assets. It allowed that team to be independent, to be innovative, to move fast. And the plan for trivago is the same. We have a great group of founders as our partners. It is a fast-moving company. They are growing very, very quickly on a global basis, and we expect them to do the same going forward. So as that business grows, as hotel and meta grows, it will become a larger portion of our business on a go-forward basis. And we think that it will be quite value-additive over the long term to our shareholders, and we're looking forward to that. We're also very -- trivago's geo focus is also quite complementary with our brands in that they're very [Audio Gap] obviously, we're getting smarter about European travel trends, working with the trivago team in order to try to gain more share within the trivago marketplace in Europe, although it's an absolutely fair game. And then as trivago is coming into the U.S., we are bidding aggressively in the trivago channel as far as our brands in the U.S. go. So it's a complementary relationship. It's a relationship that worked with TripAdvisor. And while those brands are run totally autonomously, we do think that they can be complementary within the portfolio. Mark is going to talk ETP. Mark D. Okerstrom: Yes. So with respect to ETP, we are rolling it out globally. The focus this year has been really predominantly on the U.S., as well as Europe, in terms of hotel partner sign-up. And we've seen very positive response in both markets. Some of the things that participating hotels are seeing and we're seeing are really testament to the fact that consumers really like this product. We're seeing average booking values higher for hotels before and after, and for participating hotels versus nonparticipating hotels. We're seeing room night growth accelerate for those hotels that participate after versus before. So we're seeing some pretty positive impacts for our partners. Our consumers continue to like it, and net-net, we'd say a positive result. And we're going to continue to look at rolling this out globally. Again, we said we'd control the rollout. We like what we see, and we're going to continue to go.

Next question is from the line of Ross Sandler with Deutsche Bank. Ross Sandler - Deutsche Bank AG, Research Division: So Mark, I know you don't officially comment yet on 2014, but as we look into next year, you're going to be comping some of the issues from Hotwire from this year. The core business x Hotwire is obviously very solid and now leveraging, and then you've got trivago kind of above average growth. So even before we layer in the $50 million contribution from Travelocity, could we see kind of back to the double-digit EBITDA growth rate for 2014? Is that a realistic way to think about it? And then on marketing efficiency, just to go back to this one for a sec, if we strip out trivago, it looked like the direct marketing spend was up about 11%. Units were up about 20%. Hotel room nights, up 20%. So that's a pretty big efficiency gain. Can you just talk a little bit more about where that's coming from in the quarter? Mark D. Okerstrom: Sure. So yes, I don't want to comment too much further on 2014, beyond what we said would be the run rate impact for Travelocity. We'll give more guidance on our next call. I'd just remind you that the competitive environment remains pretty hot, and we do believe in the strength of this business. But let's not get ahead of ourselves yet. I will give you more guidance on the next call. With respect to marketing efficiency, listen, we -- one of the big drivers there from a year-on-year perspective is, as you'll recall, we had some pretty hard comps in Q1 and Q2 based on what we were doing last year. And the comps started to normalize in Q3, and they will be more normalized in Q4. A lot of that was driven by the fact that we were a little bit more reserved in our spend, particularly in Brand Expedia, in Q1 and Q2 of 2012. And then we stepped it up as we saw the conversion gains, and we're now lapping over that. So that's sort of the driver between the delta there. If you look at sales and marketing, excluding eLong and trivago, per room night, the numbers look a little bit more stable, particularly if you look at that on a trailing 12-month basis.

Our next question is from the line of Brian Fitzgerald with Jefferies. Brian Patrick Fitzgerald - Jefferies LLC, Research Division: Maybe a follow-on to Ross' question. Are you seeing any dynamics to your e-mail marketing campaign with that your partnerships with Groupon post Google's kind of newer e-mail filters? And then when you think about ETP, does it resonate more or less with different types or styles or locations of hotels?

Sure. As far as the e-mail marketing campaigns go, we haven't seen material changes to our e-mail channel as far as trends go. So it could be just that Gmail is not a high enough percentage of our opens, et cetera. I'd say that the most significant trend for our e-mail channel is that the percentage of our e-mails now open using some kind of mobile device, a mobile phone, tablet, et cetera, is very, very significant. So our building out our e-mail templates, et cetera, to be responsive, to look good on a smartphone, as well as on desktop, is something that we're much more focused on, on a go-forward basis. And we made good strides there. As far as ETP resonating more or less with different types of hotels, we're getting broad acceptance for ETP and expansion of ETP. I would say that ETP penetration in Europe is leading as far as our total penetration, and we think that ETP is going to be a very, very significant part of our European business, really, going into Q4 and next year. And we're looking forward to that helping our European business and building our base there. Mark D. Okerstrom: Yes, the only thing I would add to that is we do have a lot of the major chain hotels signed up and seen very, very positive results. So it's -- between chains and independents we're seeing good adoption. And again, the numbers that I mentioned around some of the benefits that participating hotels are seeing are really shared broadly across all segments.

Yes. The volume helped.

Next question is from the line of Ken Sena with Evercore Partners. Kenneth Sena - Evercore Partners Inc., Research Division: Anything else you could say in terms of marketing efficiency, possibly across channels, in terms of search or meta or maybe by geography that you saw in the quarter? And then also, can you update us on your own review efforts in terms of maybe building a verified review base for your users? And also, just lastly, I know the Travelocity deal, you're still working through the integration, and you commented on next year. But there wasn't anything in the quarter that you can comment in terms of impact, is there? Mark D. Okerstrom: Great. So with respect to marketing efficiency, just generally, what I would say is that we have all of our major brands driving to improve conversion. And we like what we see. Brand Expedia continues to test and learn and improve conversion. The Hotels.com continues to drive conversion gains. Obviously, having the Expedia Traveler Preference program is starting to help us with conversion. And all of those things lead to the ability to have better marketing efficiencies. What that ability translates into for us, particularly in variable marketing channels, is the ability to reinvest that money to drive continued strong top line and unit volume growth trends. So that's basically what you're seeing across our businesses, and it's something we're going to continue to try to drive going forward. Dara, do you want to take the review?

Yes, sure. As far as the review base goes, we think having Verified Reviews is a significant competitive advantage over other players who don't. Obviously, the reviews that show up on Expedia, Hotels.com, et cetera, are there from our users. And really, the activity that we have been focused on has been trying to drive higher the percentage of users who stay and review their hotel stay. The more reviews we have, in general, we think the better content we have for our users, and we do think that the number reviews is also correlated to conversion. So there's a lot of activity going on as far as review collection goes. Our review collection percentages are increasing, and we think an important next step is going to be review collection using your phone. At this point, we are focused on desktop, but we will certainly move to mobile review collection, which we think will be a big, big improvement. Our mobile itineraries are getting much better. The experience is getting much better, and we're certainly going to move that experience into reviews as well. Mark D. Okerstrom: And with respect to Travelocity, I would say nothing meaningful. Obviously, there's transaction costs, and we did start to buy some of the hardware and infrastructure associated with the deal. But I would say nothing meaningful. And I would remind you that our full year guidance includes -- for 2013, includes the impact of any incremental spending we'll do to ramp that deal up this year.

Yes, and I think that spend will show up more significantly in Q4 and Q1.

Your next question is from the line of Michael Millman with Millman Research Associates. Michael Millman - Millman Research Associates: I have some questions on car rental, and then I have a follow-up on mobile devices as well. So in the third quarter, could you give us some idea comparing rental days -- year-over-year rental days and revenue per day and maybe also kind of an opaque retail mix? Mark D. Okerstrom: Sure, Mike. So I would say that we didn't see significant changes in those metrics. They were sort of flattish year-on-year. I would say generally, what we're seeing in the car industry is broadly consistent with what we've seen over the course of this year. You've got domestic rising fleet costs and consolidation providing a landscape that allows suppliers the ability to price up. That said, we have seen a little bit of a recent softening in demand in the industry, and that has created a little bit more inventory to be available for some of the deeper discount channels. Michael Millman - Millman Research Associates: Talking about the deeper discounts, [Audio Gap] look at Hotwire and then look at your advertisements on Expedia. It looks like the pricing is at -- or at least for the discount, is at or below Hotwire. Has this basically putting Hotwire in an untenable position in the car rental business?

Sorry, this is -- you're saying retail pricing at Brand Expedia versus Hotwire? Michael Millman - Millman Research Associates: Yes, and for the discounters, not for the premium brands.

Yes, I think -- listen, I think Hotwire's car business in general is following its overall business, in that it suffered early in the year because of the issues that we talked about. It's stable at this point, and we did go through a period where opaque discounts at Hotwire weren't quite what they were earlier. We're seeing some return there. So while the Hotwire car rental business is by no means peppy, it's stable, and we're hoping for some improvement going forward. Michael Millman - Millman Research Associates: Okay. And on the mobile phones, on the mobile devices, who are the -- we know who the winners are. Who are the losers? Where is this business coming from?

Well, I don't think there are any losers. I mean, I think that consumers are certainly winners because they get a lot of benefit from using these mobile devices. They have more choice, and we are there, and a lot of other OTAs are there, when they want to make those last-minute bookings. So I don't see any losers in this, in that it's a net better product, and we're seeing consumers flock to that net better product. And we're certainly seeing our suppliers participate in mobile and mobile-only deals, for example, pretty aggressively. So we think it's a win-win. Maybe your traditional phone line company is a loser, but I think for the travel space, mobile is quite a positive factor on many fronts.

Our next question is from the line of Brian Nowak with Susquehanna. Brian Nowak - Susquehanna Financial Group, LLLP, Research Division: I have a couple of quick ones. On Trip, I just wanted to follow up, so what steps do you think you still have to take in order to fix your share of traffic and exits? Is it due to bidding? Do you need to bid more in order to fix the share of exits or there's something else? And how do you go about fixing it? And then, Dara, I guess at a higher level, how do you think about the lifetime value of customers coming through meta versus coming through Google versus coming through the old Trip pop-up model?

Yes, as far as the steps to fix traffic share on Trip, I want to say I think we're on our way, and it's a lot of steps to make sure that our inventories display properly, to get more data, to be able to bid more efficiently and to make the right bid based on predicted conversion and predicted ADRs, to increase the breadth of hotels that we're bidding on and the languages and the geos, et cetera. And this is not a process that happens overnight. It's a process that's iterative. And on a weekly basis, in general, we see trends getting better, and we certainly feel better about our TripAdvisor channel and the performance there coming out of Q3 than we did coming out of Q2. So we're hoping for more improvement. The TripAdvisor channel -- the TripAdvisor team has been very good to work with, and we look forward to working with them to continue to improve our performance with Trip. As far as lifetime customer value, we do look at customer behavior coming from different channels after the initial booking. What does the customer do? What does the customer do the second time they come back to us through a meta channel, Google channel, Trip channel, et cetera? We certainly take that into account as far as our bidding algorithms on each of those channels.

Next question is from the line of Justin Post with Bank of America. Paul Judd Bieber - BofA Merrill Lynch, Research Division: This is Paul Bieber for Justin. I was hoping you could comment on the demand environment in Europe. And then secondly, on the Travelocity base case you outlined, can you provide us with just some very high-level assumptions behind the base case scenario?

Sure. As far as the demand environment in Europe, I'd say broadly stable. We're seeing good European growth, Northern Europe, Southern Europe, et cetera. The euro strength is a new positive factor for us. And we are seeing growth in a number of channels, including trivago, which is growing very, very quickly in Europe. So we're satisfied with the trends we see. We definitely think that we can do better, and at this point, we don't see any red flags in Europe. It's a very competitive marketplace. And as you know, Booking.com is quite strong in Europe. So we've got an uphill climb, but the direction, at least, is positive for us. And Mark, you want to talk Travelocity? Mark D. Okerstrom: Sure, yes. So with respect to Travelocity, obviously, the results of Travelocity historically are not our information to share, and I don't want to get into a ton of detail. But I will give you a few other tips on how to think about this. One is, firstly and foremostly, the historic Travelocity business is a result of the historic Travelocity platform, and the results that they're able to produce on our platform may be significantly different. So I think that's one caveat. Secondly, I would just remind you of the fact that the guidance we gave was full year run-rate guidance and not a 2014 realized number, and there's lots of variability around that. So with those caveats in mind, just a couple of things. One is that, historically, the Travelocity business has been a little bit more air-heavy than we would have seen in our Expedia U.S. and Canadian points of sale. Secondly is that there are some historic figures floating around, either by industry observers or actual historic numbers that have been put out there. I would just caution you that the business for which this deal relates, which is the Travelocity-branded websites in the U.S. and Canada, is a subset of the historic Travelocity business, which would include things like Last Minute, a car business they had, ZUJI, a fairly big private-label business. So I would just ask people to take that into consideration when they're modeling. And then the last thing, as I've stated, that our base case sees that business as accretive to our EBITDA margins. So hopefully, that gives you a few other things to help you.

And just to add on, on an operational basis, you should think about our integration of the Travelocity platform as quite similar to how we rolled out the Brand Expedia platform. So it's not going to be flipping a switch, and all of a sudden, you're going to see a new site. It will be rolled out on a sterial [ph] basis by product. As you might guess, the hotel product is going to go first because that's where most of the money is. And there will be testing and learning. So the timing of the rollout is really going to depend on a bunch of testings that we do live on the site. And if things are working well, the rollout will be faster. And if they're not, we'll go back to the drawing board and we'll do so more work and then try again. So it will be gradual, and there won't be any kind of switch that's flipped, so to speak. Paul Judd Bieber - BofA Merrill Lynch, Research Division: Okay. And one quick follow-up. You mentioned a couple different times the elevated competition in the U.S. and yet, you benefited from direct traffic. Can you just help me reconcile those 2 comments? Mark D. Okerstrom: Well, I would just say that what we said on direct traffic is generally in the bucket of all of the challenges we saw last quarter. We've seen trends stable to improving. Of those trends, direct traffic in aggregate would be one of them. So I wouldn't draw a dramatic conclusion that we're seeing a huge increase in our direct traffic. What I would tell you about competitive intensity is that it is increasing, that there are more players in the marketplace, particularly players who are focused on television advertising, including existing incumbents who weren't historically focused on television advertising. And that creates a tougher environment for getting share of voice in that channel, which can have an impact on our direct sales -- our direct traffic. Versus the end of Q2, in Q3, there was probably a little bit of quieting in that television advertising noise. But again, I wouldn't take -- I wouldn't allow that to take away from the fact that competitive intensity is strong, and we expect it to be that way in the U.S. for a long time to come.

Next question is from the line of Andrew Marok with Cowen & Company. Andrew Marok - Cowen and Company, LLC, Research Division: I just had 2 quick questions. On the mobile front, I know you had highlighted eLong. Are there any other brands in your portfolio that you wanted to highlight as performing particularly well in the quarter? And then on the 28% international room night growth, I was wondering if you saw any geographies that were notably strong or weak in the quarter.

Yes, as far as mobile front, I'd say that Hotels.com has done a terrific job with mobile broadly, both domestically and internationally. The download numbers are very, very strong, and Hotels.com has been an early investor in both mobile products and mobile downloads for some period of time. So it's not a quarter story. It's a long-term story for Hotels.com. And then on the Expedia side, I think the Expedia team arguably started late, but I think the Expedia product in mobile, the experience on hotel, the experience on air is just terrific. And that team has done a great, great job as far as design, experience, et cetera, goes. And I think we'll see great benefits from that going forward. Both Hotels.com and Expedia are coming up with some pretty terrific iPad apps, Hotels.com this year, Expedia into next year, that we're very excited about. And then Egencia is also coming out with an app that we think is dynamite as well. So mobile for us is broad, and we are investing aggressively. And again, we think it's a very, very big opportunity for us, and we're investing appropriate to the level of that activity. Mark D. Okerstrom: And with respect to international room night growth, I would say nothing specific to call out. You'll see growth pretty consistent this quarter versus last quarter, similar to what you might expect in terms of trends. Europe growing nicely. Asia Pacific and Latin America are growing more quickly.

Yes, I think the only thing that I'd add to that is that some of the currency effects have certainly affected traffic patterns. So the Japanese yen being down has hurt Japanese outbound business. The Australian dollar being down has hurt the outbound business a bit. But those are relatively minor factors within the full portfolio.

Our next question is from the line of Dean Prissman with Crédit Suisse. Dean Prissman - Crédit Suisse AG, Research Division: Is there any additional color you can provide in terms of the measures and your approach in managing through the challenges at Hotwire? And then secondly, on mobile, have you seen any benefits from Google's rollout of enhanced campaigns?

Yes, as far as Hotwire goes, we don't want to get into detail as far as the Hotwire plans go. Suffice it to say that the trends have stabilized, that the teams are very focused on making sure that Hotwire is relevant and competitive within the broader comp set, but also as it relates to Priceline Express Deals, which is a new product that's out there. And I think at the mobile front as well, the Hotwire product can really sing with mobile, especially with the last-minute nature of mobile in general. And that's something that the Hotwire team is quite focused on. So we are certainly not satisfied by any way with Hotwire performance, and I think that team is not satisfied. But they're focused. They're executing, and we're very confident that they're going to come out running in Q4 and going into next year. As far as the mobile goes, the benefit from enhanced campaigns, nothing material there. We see, obviously, there are a lot of players engaging in mobile. I'd say our ROIs on mobile web are less than our ROIs on desktop. CPCs still seem to be fairly elevated relative to conversions and also length of stay. The length of stay for mobile tends to be much shorter. So we haven't seen significant changes there, and we'll work to optimize that channel. And I think we're making great traction there, especially on the app front.

Next question is from the line of Scott Devitt with Morgan Stanley. Nishant Verma - Morgan Stanley, Research Division: This is Nishant Verma sitting in for Scott. Could you provide some more color on your partnership with Home [Audio Gap] I guess, both strategic rationale and then how you envision integrating the vacation rental listings onto Expedia.com. Would it be sort of in the search results or more so a separate tab? And any other color would be helpful.

I think the visioning is pretty simple in that Home Away is a -- has terrific product out there. And we want to see whether that product is a product that resonates with our consumers. As far as integrating listings into our search results page or separate tabs, I think it's a little bit too soon to talk about that. We would like to have the most integrated experience that we can, but there will be -- how it shows up is really going to be driven by customer preference. We're going to try a number of different approaches, and then we'll let the customers vote on the approach that they like the most.

Next question is from the line of Mike Olson with Piper Jaffray. Andrew D. Connor - Piper Jaffray Companies, Research Division: This is Andrew Connor on for Mike. Really following up on the Home Away discussion, just really curious to hear Dara's high-level thoughts on the growth associated with short-term rental sites like Airbnb and Wimdu. And particularly in Europe, do you guys view this sharing economy trend as sustainable and long term? And do you feel like there may be an opportunity for you guys to potentially layer in more short-term rental inventory to your bookable properties?

Yes, I think from a long-term standpoint, it's obviously hit a consumer chord, and I think one of the real unknowns is going to be the regulatory environment, our government regulators, what are government regulators going to do about this product, is it safe long term. And from a regulation standpoint, how does it relate to hotels that have to pay occupancy taxes, for example, here, VAT. So there's -- it's a fragmented marketplace that's forming. We do think that it will continue to form. We do think it will be regulated over time, and the size of it will, to some extent, partly depend on that regulation. But we think from a consumer standpoint, it is a -- it seems to be good product and product that consumers like. So as part of our relationship with Home Away, we want to see whether that's product that is important to Expedia customers and Hotels.com customers. And we think that it's a potentially new source of supply for us, and new sources of supply to the extent that they are scalable and safe. And our sources of supply that consumers enjoy and consumers value are quite valuable to us, because our ability to consolidate that supply give consumers one look at all kinds of different choices as to where they can stay in a particular marketplace. That's where we add value. So we've got great brands. We've got great traffic. So to the extent that this business does consolidate and grow, we think we can partner with it and we think we can be a significant positive for all the parties involved. So we're really looking forward to our partnership with Home Away. We'll see how that goes, and then we'll take it from there.

At this time, there are no further questions in queue. I'd like to turn the call back over to Mr. Pickerill for closing remarks.

Okay, thanks a lot. Thanks, everybody, for joining us on the call today. Really appreciate your interest. Dara, any closing words?

No, just good work from the Expedia Inc. team across the world. We did a good job, and we look forward to talking to you next quarter. I guess it's in June -- I guess it's in February. Thank you.

Ladies and gentlemen, that does conclude our conference for today. We'd like to thank you for your participation, and you may now disconnect.