Priceline.com Q2 2010 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ingrid Chung - Goldman Sachs - Analyst : Thanks, good afternoon. I was wondering if you could tell me about the geographic distribution of the strength in 2Q and as we look into 3Q. Which areas -- which geographic areas are stronger and which ones are weaker? Were they your nearer markets or more mature markets, and I was wondering if you could talk to when opaque could grow again? Thanks. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Ingrid Chung - Goldman Sachs - Analyst : Could I just follow up and ask, in terms of Agoda, do you think you're back to your growth rate pre all the political turmoil that was going on?

Question: Ingrid Chung - Goldman Sachs - Analyst : Okay.

Question: Ingrid Chung - Goldman Sachs - Analyst : Okay, great. Thank you.

Question: Imran Kahn - JPMorgan - Analyst : Yes, hi. Thank you so much for taking my questions. A couple of questions. First, it seems like on advertising, you've got some leverage as a percentage of gross profit on a year-over-year basis. Just trying to get a better sense of what type of competition you're seeing for key word trends as the (inaudible) trends continue to improve, what's driving the leverage on the advertising side? And secondly, trying to better understand the synergistic opportunities you see with TravelJigsaw. Are you planning to integrate that with Booking, or do you plan to keep it separate? Are you going to cross-sell inventories, any trend would be very helpful. Thank you.

Question: Mark Mahaney - CitiGroup - Analyst : Great, thanks. I wanted to just get into the international report a little bit more. You had deceleration, but it was less severe than the toughening comp and that's how your guide is, too. Given -- even if you strip out a couple of the events like the impact from TravelJigsaw, did not the World Cup or the volcano have the impact you thought it would have? And is there something going on particularly in terms of the Asia markets? You mentioned Booking.com showing success there. Do you think that you maybe hit critical mass, both for Agoda and for Booking.com in terms of Asia and that's what's behind the real lack of significant deceleration? Thank you. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Mark Mahaney - CitiGroup - Analyst : Thank you, Jeff.

Question: Justin Post - Bank of America - Analyst : Thank you. Thanks. A couple things. First, couple of the business-focused hotels have suggested maybe offering less inventory to opaque channels or just online channels. How dependent are you on just a couple of the major US chains, especially in Europe at all? And then secondly, Google is going to be trying to improve their travel search capabilities and just wondering if you think about how much traffic you get from there. Is it a significant amount of traffic from Google? And if they do have a better consumer experience, how you would see that affecting your traffic over the long-term? Thank you.

Question: Ross Sandler - RBC Capital Markets - Analyst : Hey, guys. Nice quarter. Just two quick questions. Can we drill down a little bit further on Europe hotel. So you talked about Asia versus Europe. What about -- can you talk about the growth you're seeing in your top 10 European markets versus the second-tier markets. And then a second follow-up question for Dan, on the online marketing expense as a percent of gross profit, you have now seen basically flat, no deleverage in the second quarter, and you've got it the same for the third quarter. This is a bit of a departure from the past couple-quarter trend. So is it -- should we continue to assume some deleverage in the future or is the stronger unit economics from the ADR growth why you're seeing a lack of deleverage? Any color there? Thanks.

Question: Ross Sandler - RBC Capital Markets - Analyst : Thanks.

Question: Doug Anmuth - Barclays Capital - Analyst : Great. Thanks for taking the question. Two things. First on the air tickets, you saw some modest reacceleration, and I think on an easier comp in 2Q. Can you talk about whether you're seeing any impact from higher airfares on leisure travel? And then secondly, can you give us some more color on Agoda's partnership with Universal Travel Group and how you're thinking about this strategically going forward. Thanks.

Question: Doug Anmuth - Barclays Capital - Analyst : Okay, thank you.

Question: Scott Kessler - Standard & Poor's - Analyst : Thanks a lot. I wonder if you could provide additional details on Agoda or the Asia-focused business? Essentially I'm curious to know if you could provide some additional metrics related to that particular set of operations. And also, if you could talk a little bit about two key markets within that particular continent, obviously China and India. I know there has been some discussion on these calls in the past about what you may or may not be trying to do at some point, whether it's now or later, in those particular areas. Just wanted potentially an update. Thanks a lot.

Question: Scott Kessler - Standard & Poor's - Analyst : Jeff, thanks for the detail. If I could just follow up really quickly, do you think that Agoda as a business and as potential growth continues to evolve, is going to be sufficient from, say, a size-and scale-perspective to attack these markets and others in Asia, or do you think that potentially additional acquisition activity might be appropriate, given the opportunities that lie there? Thanks very much.

Question: Scott Kessler - Standard & Poor's - Analyst : Thanks a lot.

Question: Mike Olson - Piper Jaffray - Analyst : All right, thanks. Good afternoon. I don't want to beat the new markets piece to death here, but what markets outside of Asia are of interest to you, if any, or is any newer market build out going to be in Asia?

Question: Mike Olson - Piper Jaffray - Analyst : Okay, and then a real high-level one, do you think there's any truth to the idea that, given some uncertainty in the economy, that Europe travelers are traveling more within Europe versus internationally, and is that possibly having an impact on your Europe hotel bookings?

Question: Mike Olson - Piper Jaffray - Analyst : Okay. Thanks very much.

Question: Michael Millman - Millman Research - Analyst : Thank you. Could you discuss what, if any, incremental business you're seeing from mobile devices and if that business is broadly similar to your current business, or are there certain focuses on that business? And you mentioned that some of the other OTAs are now putting opaque options. Are you seeing any impact from that either in availability of hotels and cars or in business flow or other?

Question: Michael Millman - Millman Research - Analyst : Getting back quickly to the mobile devices, is the visitation typically incremental new business or is it some of your current customers?

Question: Michael Millman - Millman Research - Analyst : Great, thank you.

Question: Michael Millman - Millman Research - Analyst : Thank you.