TripAdvisor: Helping travelers plan

(MoneyWatch) Serial entrepreneur Steve Kaufer co-founded TripAdvisor in 2000, with the mission to help travelers around the world plan and have the perfect trip. Today it has become the largest travel community portal in the world, with more than 60 million unique monthly visitors, who have left over 75 million reviews hotels, restaurant and travel related reviews. The site operates in 30 countries worldwide, including China.

Rebecca Jarvis: What were you doing before founding TripAdvisor?

Steve Kaufer: I was co-founder and vice president/engineering for a software tools company called Centerline Software.

RJ: How did you choose the name "TripAdvisor?" What were some of the other names you considered?

SK: We wanted something descriptive, but all the interesting domain names were taken. We started life as, but changed to the friendlier TripAdvisor when we bought the domain.

RJ: How does TripAdvisor make money? How long did it take before TripAdvisor started making money?

SK: TripAdvisor offers travel suppliers effective graphical advertising and cost-per-click marketing platforms.

We have three main sources of revenue. CPC accounts for the largest percentage of revenue; this is when the user clicks on the "show-prices" (or "cost-per-click") button, and then we pass those very relevant leads onto our OTA (online travel agent) partners and hoteliers.

The next largest segment of revenue is display advertising; this is the sale of relevant, targeted advertising that enriches the overall user experience.

Finally, we have our subscription-based revenue, including business listings (which allow property owners to provide their phone number, website, and e-mail address right beneath the property name for that direct booking) and vacation rentals.

TripAdvisor announced profitability August 2002.

RJ: You studied computer science at Harvard, what's the number one degree program you would recommend people pursue today?

SK: I think computer science is great, as you leave college with enough knowledge to go out and build/create something. And personally, I love the challenge of programming. If computer science isn't for you, science/bio. I think it would be really interesting to be part of the revolution in personalized medicine right now.