TripAdvisor: pack for rain - FT.com Travel advisory website should fight Google without regulatory help, but its fat margins will take a beating If Google is set to crush the travel advisory website TripAdvisor, that fact is not reflected in the smaller company's stock price. The shares have risen 75 per cent in the past five months, to an all-time high of $52. They trade at 30 times next year's earnings, the highest since the company was spun off by Expedia in 2011. It has an enterprise value of $7.5bn. Not bad for a company that makes its money by aggregating and organising content - reviews, booking and pricing information - that others generate. It is nervous-making for any company to occupy a space Google is eyeing, and Google is keen on travel, as its $700m purchase of flight-pricing software company ITA in 2010 showed. TripAdvisor has joined Expedia and Microsoft in urging Europe's antitrust authorities to prevent Google from using its dominance in internet search to dominate the travel search market. US authorities were right to decline a similar entreaty. There is nothing wrong with Google taking advantage of its scale, wealth and wherewithal to bring its customers well-targeted travel information, as long as its own products remain clearly distinguished in its search results and switching to competitors remains costless. So, if reason prevails, TripAdvisor will have to fight Google without regulatory help. It has done well so far, expanding sales (ads, mostly) at 25 per cent annually for the past three years. And it will be very hard for Google to reproduce the depth of information at TripAdvisor. That does not mean the pressure won't hit TripAdvisor's fat margins. Despite targeting sales growth of more than 20 per cent this year, management expects negative operating leverage, because of marketing and technology investments. Has growth become permanently more expensive for TripAdvisor? At the current price, the market bets not. Safe travels.