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As long as the cost of building is maintained and the incremental infrastructure to handle more traffic is less than incremental revenue it’s a financial win.
No doubt Expedia did its own due diligence on that.
The Expedia agreement is also in contrast to Travelocity Business and other global assets, which have been sold outright.
EFT: Did Expedia’s growing mobile portfolio play a big part in this deal?The key is understanding how desktop and mobile are used as complements versus as stand-alone.EFT: Considering the significance of brands in the e-commerce category, how do you think this move is going to result in new benefits for Travelocity? LM: The best thing it can do for Travelocity is narrow its focus, in this case on branding, marketing, and conquesting (placing ads right next to content about your competitors).EFT: How would you describe the Expedia-Travelocity strategic marketing agreement?Isn’t it too vague to be called a strategic alliance?