Earlier today, TripAdvisor added its name to the list of companies publicly trading on the NASDAQ. After doing so, TripAdvisor’s co-founder Stephen Kaufer stopped by TechCrunch for a Founder Stories interview with host, Chris Dixon.

TripAdvisor offers user-generated reviews of everything from hotels to restaurants and claims “50 million monthly unique visitors and 20 million members.” Healthy numbers now, but dial back a decade and TripAdvisor was gasping for air. Kaufer says 18-months in “we had no clients, we had no revenue and we were running out of money.”

Realizing time was short, the team dumped their initial business model after recognizing a demo they released on the side “to showcase what someone else could do with [our] technology” was gathering steam. Leadership built a plan around the concept, added a “write your own review” button and was off to the races with what we now know as TripAdvisor.

Kaufer dives into additional detail on those early days, discusses Expedia’s acquisition of his company and voices concerns about Google as the interview unfolds. Make sure to see it all by watching the entire exchange.

Also be sure to check out Chris Dixon’s thoughts on the interview, the IPO, and issues surrounding it all on his blog, cdixon.org.

Episode II of Kaufer’s interview is coming up.

Past Founder Stories interviews featuring Mayor Bloomberg, David Karp, Dennis Crowley and many other leaders are here.

Expedia has acquired approximately 8% of the outstanding shares for $41.2 million, holds 56% of the outstanding shares (Expedia held a a previous investment in eLong), making the company the largest shareholder in eLong.

This is actually the first investment in the travel market for Tencent and the funding represents a partnership as well, in which both companies will develop online travel products and will distribute eLong’s hotel supply to Tencent’s online community. Currently Tencent says it reaches 674 million active user accounts in China. And eLong’s hotel supply portfolio now covers over 150,000 hotel properties worldwide, including more than 19,000 hotels in China, and more than 130,000 internationally through its connection with Expedia.

Flush with cash, Tencent has made a number of major investments recently, including the A-Fund. The company is also rumored to be interested in buying MySpace and just bought Riot Games for $400 million.

For Expedia, the investment gives the company a stronger foothold in China, which is a “key region” for the U.S. travel company.

Expedia/IAC must feel that spinning off TripAdvisor as a public company could be a financially lucrative move. TripAdvisor, which was founded in 2000, was originally bought by IAC in for $212 million in 2004. IAC spun off Expedia, which included TripAdvisor, in 2005. The newly formed TripAdvisor would include all of the domestic and international operations, including its flasghipsite and 18 other travel media and advertising brands.

According to the release: It is anticipated that the transaction will take the form of a distribution of stock of TripAdvisor to Expedia stockholders or a reclassification of Expedia stock, with the holders of Expedia stock receiving a proportionate amount of TripAdvisor stock, in either case in a tax free transaction. It is expected that Expedia’s dual-class equity capital structure and the governance arrangements between Barry Diller and Liberty Media will be mirrored at TripAdvisor following the transaction.

The transaction is still subject to final approval by Expedia’s Board of Directors and the company says that it will probably seek stockholder approval of the transaction. The proposed spin-off is expected to be completed in the third quarter of 2011.

Financial terms of the agreement have not been disclosed, but clearly, the airline and travel site were able to come to a mutual agreement that suited their interests financially. American had a similar issue with travel search site Orbitz, and also removed its listings in late December 2010.

American itself has been trying to build up its own bookings site, and industry insiders thought that the airline was planning to adopt Southwest’s model of offering fares and booking solely through its site. As Airfare Watchdog reported earlier this year, the benefit of having consumers buy their flights on AA.com is that the airline makes money from the extra upgrades, including seat upgrades, insurance products, vacation packages, and hotel and car reservations.

While American didn’t expect a significant drop in sales from removing fares from Expedia, the fact that the two companies eventually reached an agreement makes me wonder if there was a financial impact for the airline after all. American also recently signed a distribution deal with Priceline.

TripAdvisor, the Expedia-owned travel site, this morning announced it has boosted its mobile travel offering with the acquisition of EveryTrail. The latter, actually a service from GlobalMotion Media, is a GPS-enabled publishing platform that lets people create outdoor walking tours, hiking trails and city guides for mobile devices.

Terms of the acquisition were not disclosed.

TripAdvisor originally debuted its mobile website in March 2010, and has since added apps for iOS devices and Android, Nokia and Palm smartphones.

TripAdvisor Mobile allows users to access more than 40 million traveler reviews and opinions on hotels, restaurants and attractions. The acquisition of EveryTrail fits into the company’s plans to enrich the quality of travel information consumers can access from their mobile devices.

In a blog post, EveryTrail founder and chief executive officer Joost Schreve says the community has created over half a million travel experiences in over 160 countries, with more than 2 million geo-located photos, since its launch in October 2006.

The company has raised $1 million in seed funding back in 2009.

Mobiata creates a number of travel mobile applications including FlightTrack, TripDeck, HotelPal FlightBoard and FareCompare. FlightTrack is the developer’s most popular app and lets you check flight status, access information about delays or reschedules, locate your flight’s gates, and see real-time tracking maps of flights. FlightTrack is currently a best selling iPhone travel app in the App Store. A Pro Version of FlightTrack is also integrated into TripIt Pro. We’re not sure if that relationship will continue post-acquisition.

According to the release, the acquisition represents Expedia’s “most significant investment to date in addressing the mobile travel market.” Expedia is currently seeing 4 percent of its traffic coming from mobile browsers or app, and hopes to grow this number through the acquisition.

This week also brought the news that travel search aggregator Kayak.com is filing for a $50 million IPO. And the online travel industry is in a state of flux awaiting whether Google’s $700 million acquisition of ITA Software (which powers flight listings for both Kayak and Expedia) will be given the green-light by the Justice Department.

As you know, today is Valentine’s Day. As such, I thought it was the perfect time to write a love sonnet for my new favorite company: Expedia.com. Actually, I’ll do the opposite.

Seeing as it’s a long weekend in the United States (President’s Day is on Monday), I decided I was going to set up a little trip to get away with the girl I’m seeing. A few weeks ago, I set up all the plans for what I thought would be a nice, relaxing weekend. It’s actually been anything but relaxing. My mistake? Using Expedia to book it.

After a few hours of driving, we pulled into our destination yesterday and attempted to check-in to the hotel. Problem 1: they’ve never heard of us. My name is nowhere to be found in their reservation system. Problem 2: they were completely booked. Problem 3: even if there was a cancellation, there was a waiting list for a room because apparently, Expedia had done this exact thing to no fewer than four other couples — just at this hotel alone.

So what happened?

Well, it took me a couple hours to get a straight answer out of anyone, but apparently, the system that Expedia uses to book reservation with its partner hotels is a mixture of antiquated and just completely fucked up. Because it would be too much of a hassle, and more importantly, cost too much money, Expedia has an automated system for communicating with its partners. Sometimes this is done with an email, sometimes this is done with a fax. Yes, a fax.

In my case, Expedia’s system apparently faxed the reservation to the hotel I booked. It then claims it got a confirmation back that my hotel room was all set and ready for my arrival. The only problem? According to the hotel, not only did they not receive the fax, but obviously they never sent the confirmation back. And why would they? It turns out all their rooms had already been booked before I attempted to book mine through Expedia. Of course, according to Expedia, there were plenty of rooms available when I booked — I even had many room options to choose from.

The icing on the Valentine’s Day cake though was my subsequent six calls to and from Expedia. For the first one, after waiting on hold for 45 minutes, I was told that according to their system, my reservation was indeed confirmed. I knew this would be Expedia’s stance because I received an email from Expedia a few days prior stating that it was confirmed.

After I made it very clear to the poor girl (poor, both for having to face my wrath, and working for this awful company) that there was definitely no room under my name at my supposedly booked hotel, she didn’t seem too clear about what to do. I was demanding a full refund (obviously) and demanding that they book me another room in the city and pay for that. She put me on hold so she could talk to her manager.

When she came back on 15 minutes later, she wanted to make sure I booked the room correctly in the first place. I demanded to speak to her superior. This guy was great (that’s sarcasm). Not only was he trying to convince me that this wasn’t Expedia’s fault, but he wasn’t sure they’d be able to reimburse me for the room that they had never actually booked for me, and that I clearly wasn’t going to be staying in. He said he’d have to call me back.

Meanwhile, I get a call from another Expedia agent whom the hotel had apparently called because again, this had happened a number of times just this day for the same hotel with Expedia. He wanted to let me know that the hotel was overbooked and my reservation wouldn’t be honored. Thanks buddy.

The other agent finally calls me back. Good news: he thinks he can refund what I paid for the hotel that I’m not staying at, but wants to make sure I want another room booked for me in the city. If so, they might take some of the refund to pay for that. At this point I start really yelling. On the street. With a lot of children around.

After a solid five minutes of verbal abuse from me including no shortage of swear words, he sees my point. But he still has to call his supervisor to okay any kind of deal he can cut. He needs to call me back again, but assures me that when he does, he’ll have another room for me and the refund in my account.

He calls me back. The good news: the refund has been processed. The bad news: there are no other rooms in the city that Expedia can book for me. Not one.

Further, if I am able to find my own room outside of Expedia, the company can’t do anything for me in terms of reimbursement. He is only authorized to offer me a $100 gift certificate to use for a future Expedia purchase. If there is anything in the world I want less at this point, I can’t think of it. I’m certainly never going to book another trip through this site again.

Hearing me still upset, he suggests that maybe if I book a more expensive place, Expedia can make up the difference. That’s a ridiculous proposal for a number of reasons, but the best is that there is no way I’m going to be able to find a hotel nicer than the one I had thought I had booked to stay at on Valentine’s Day weekend. The only options were going to be shittier ones — and those are probably taken too. So maybe Expedia was trying to trick me into paying me negative $500, I’m not sure.

At this point we’re almost 2 hours into my little romantic getaway so I ask for his supervisor’s number, his supervisor’s email, my reference number, anything he can give me. I hang up the phone.

I tried calling them. It’s a switchboard. No one seems clear as to who I should talk to.

So I write this now from my quaint (used kindly) little motel that I had to book myself, at a ridiculous rate because it was so last-minute on a busy weekend, with my own money. Never in my life have I had an experience as bad as I just did with an online company. This includes Comcast and AT&T. Expedia just made them look like models of business perfection.

Expedia, which was founded as a division of Microsoft in 1995, was later spun-off into its own company in the IPO-happy days of 1999. Ticketmaster then bought it in 2001, and eventually, it became a company under the IAC conglomerate. IAC spun it off again in 2005 as Expedia, Inc, which also includes the sites Hotels.com, TripAdvisor, HotWire, and others. In other words, the company’s history has been a mess.

Despite being an industry bicycle (everyone has had a ride), Expedia still manages to make $3 billion in revenues a year — undoubtedly helped by cases like mine where they try to make you pay for places you can’t even stay at because they can’t seem to figure out how to properly do a confirmation. Well, except if that confirmation is with one of their never-ending chain of superiors who needs to confirm a Kleenex in case an employee sneezes.

And so ends my love story about Expedia. I write this now both because it’s a nice Valentine’s Day tale, but also as a warning to anyone using the service. A simple Google search yields results that show I’m hardly alone in my experience. In fact, the number of hate sites specifically about Expedia is quite impressive.

There are far too many other competent companies out there that do the same thing, including a number of startups. Kayak is the one you hear about the most, unfortunately, they have a deal to offer up Expedia results first. Feel free to leave your favorite travel startups in the comments, I’d really like to know the best alternatives.

I also write this because even if Barry Diller (Chairman) or some other higher-up sees this post and offers me a full reimbursement of my trip, I’m not accepting it at this point. They may not have ruined my Valentine’s Day, but it wasn’t for a lack of trying.

Dearest Expedia,

Happy Valentine’s Day.

It’s over.

Love,

MG

Update: Some commenters are wondering if TechCrunch is really the best place for this type of post. To that, I say we have to hold these companies accountable for their crap customer service. It shouldn’t matter if they’re talking to a writer for one of the biggest blogs in the world or anyone else. Expedia routinely fails in customer service, but they get away with it because most of the time people don’t have this type of platform to expose these stories.

For a great example of how screw-ups and customer service should be handled, look at Netflix. Sure, I hate their new 28-day window policy, but they absolutely nail it in terms of customer service. A few months ago, their streaming service had a brief outage. Most members didn’t even notice, but Netflix emailed all of them offering a partial refund for the month. The same exact thing happened last week also.

Compare this with Expedia offering me a $100 gift certificate to use their service more only after I bitched for over an hour. And screwing up a travel arrangement is obviously a bigger fiasco than a streaming movie not working. Even the airlines seem to understand this. When they screw up, they not only pick up your hotel for the night (if you have stay overnight), but they often offer you a pass for free air travel somewhere else in the future. Most would argue that their customer service is still awful, but there’s no denying that it makes Expedia look like the absolute worst.

Also remember that by using Expedia, I’m putting my faith in them that they’ll be able to come through and ensure my travel arrangements — or else, why use them? When they send me an email saying everything is “confirmed” (which they actually did not just once, but twice), I take their word for it. Why wouldn’t I? Well, I won’t ever again but only because I’ll never use them ever again. And I’d recommend that any traveler do the same, or at least be very wary of their “confirmations.”

Update 2: Expedia has finally responded with the key words, “we accept full responsibility.”

I’ll paste the full mea culpa below, but the basic gist is that if a user books a reservation through them, they have every right to expect that it will be honored. Expedia says it is still investigating what exactly went wrong (as I noted in the original post, both sides seemed to be blaming a fax machine), but acknowledges that it really shouldn’t matter what the issue was, just that there was an issue and that they should have done more to try to resolve it.

The company is offering me a full refund of my original trip, as well as offering to reimburse any accommodation expenses I incurred as a result of the situation. They’re also now offering me a $200 coupon for future travel (up from the original $100 they had offered me). As I said in the original post, I don’t plan to accept any compensation beyond my original refund. This was never about the money, it was about Expedia doing what is right for its customers, no matter if they’re a random person with their family, or someone with access to one of the largest blogs in the world.

“We have already taken steps to improve our customer service and confirmation process based on this situation,” they write. And I hope they mean that — for all of us.

The email:

Mr. Siegler,

I am writing on Expedia’s behalf about the issue you endured over Valentine’s Day weekend.  We are terribly sorry that this happened. This situation is not acceptable, and we accept full responsibility.

Please know that we and the hotel are conducting a thorough examination of the circumstances that led to your unacceptably bad experience.  We have already taken steps to improve our customer service and confirmation process based on this situation.  We understand that the specific details of the confirmation process should not be a concern for any of our travelers. You should have every expectation that any reservation you book through Expedia will be honored.

While we understand that nothing we do can make up for your experience this past weekend, we are offering the following resolution: In addition to refunding your credit card in full, which we processed Sunday, we will also reimburse the accommodation expenses you incurred in rebooking yourself to a new hotel.  We will also provide you with a coupon for $ 200 off any future hotel or package booked with Expedia.

Google and Microsoft are famous for asking brainteasers during employment interviews to see how candidates think on their feet. But they are not the only companies who ask oddball questions. Glassdoor, the anonymous employee review site, collects these questions from interviewees and just posted a list of the 25 oddest questions from last year.

Most of them tend to be math problems (“How many lightbulbs are in this building?”), but there are a few which are more creative and go deeper to reveal not only a candidate’s character, but the company’s character as well. When an interviewer for oil services behemoth Schlumberger asks an interviewee for his best MacGyver moment, he is projecting a sense of adventure onto the prospective job that is being applied for. The question almost says more about the prospective job than any answer says about the candidate: “We’re looking for a MacGyver. Are you a MacGyver?”

Here are a few of the standout questions from Glassdoor’s list and the companies which asked them:

• What was your best McGuyver [sic] moment? —Schlumberger
• How many tennis balls are in this room and why?  —Yahoo
• How would you move Mount Fuji?  —Microsoft
• What should it cost to rent Central Park for commercial purposes?  —Bain & Co.
• If I put you in a sealed room with a phone that had no dial tone, how would you fix it?  —Apple
• How would you sell me eggnog in Florida in the summer?  —Expedia

http://www.hulu.com/embed/5hUEVyF3633aqqq0x3Q2Dg

Although the number of booking transactions handled by the company actually saw a small uptick, gross bookings decreased 5%. As a result, revenues went down 3% (from $795 million in 2008 to $770 million) and operating income decreased a staggering 33%.

On the upside, Expedia’s flight and hotel bookings rose 10% in the second quarter compared to the first quarter following some expense-cutting measures and airline fare cuts. The company’s second-quarter profit was $41 million, or 14 cents per share.

And while earnings fell 57%, Expedia’s results beat Wall Street expectations, sending shares up 13% at $20.73 in recent trading on Nasdaq. The stock has more than doubled this year, up about 37% in the past month.

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Expedia, next to online travel agency Expedia.com, owns a number of properties in the field, including Hotels.com, TripAdvisor and Hotwire.

DealBase.com, an online database devoted to aggregating hotel deals and packages, has secured $1 million in Series A funding from angel investors including Russ Siegelman, a partner at Kleiner Perkins Caufield & Byers; Bob Zipp, managing director of Amicus Capital; and Josh Hannah, general partner at Matrix Partners and former CEO of eHow.com.

Launched in November 2008, DealBase crawls the web to create a database of hotel deals, special offers and packages, which currently number more than 22,000 deals, from over 3,500 sources, adding up to $4,660,093 in total savings on the site. The online travel industry is a competitive market chock full of sites that find consumer deals for travel, which makes the popularity contest incredibly tough. Expedia, Kayak, Travelzoo and others all offer packages and deals through their platforms and have a dedicated user base.

What makes DealBase’s site slightly more unique is its “Deal Analyzer” functionality that compares deal prices to regular prices, and then rates the deal for travelers so they can determine if they’re getting a good deal or not. Sam Shank, founder of DealBase, says that 15 percent of deals on the site have negative savings. But Microsoft-owned Farecast, a travel site focused in finding deals for hotels and air travel, also has a feature that measures how well-priced the hotel is compared to its original pricing and other hotels. The main difference is that Farecast doesn’t limit its search to just deals and packages while DealBase only lists deals and special promotions for hotels.

Shank also maintains that since DealBase lets any hotels post advertisements for free, with no advertising deals, the process is transparent and hotels have more of an incentive in the current economy to post a deal for free. Currently, DealBase features over 500 deals for New York City Hotels while Travelzoo lists only 7 deals. Expedia also features nearly 500 deals for hotels in New York. If DealBase’s database has the same reach and information of more established sites like Expedia, that could be a good sign.

Shank’s previous startup, TravelPost, was one of the larger hotel review sites in the US and was acquired by SideStep, a comprehensive travel deal search engine. SideStep was then acquired by competitor Kayak in December 2007 for $180 million.

Michael wrote about rumors of a Google/ Skype hookup April 1, a deal that would make a lot of sense. One that doesn’t are rumors that Google may be getting ready to bid for travel giant Expedia.

Expedia shares were up over 9% Tuesday and a further 1% Wednesday based on the rumors (chart above) for a market cap of $7.18 billion. Expedia stock is still down approx. 30% from its October 2007 peak.

Rick Aristotle Munarriz at Motley Fool makes a lot of sense:

I don’t put a lot of weight behind the pursuit of Expedia. I may have suggested last month that Expedia would look good on the arm of another search engine star, but that is mostly because of the attraction of Expedia’s Web 2.0 properties like TripAdvisor.com….As the paid-search leader, Google relies on travel portals like Priceline, Travelocity, and Orbitz Worldwide, to bid for placement on its travel-related search results. Things could get hairy if Google snaps up Expedia. Sleeping with the enemy is one thing. Paying for its fare and making a rival stronger in the process, is another…

Now that Google has the DoubleClick acquisition out of the way, welcome back to Google takeover silly season. Expect to see lots of left field speculation in the coming months as the market tries to work out where Google will next park some of its bulging cash reserves.

—Noting that, in 2007, Internet stocks delivered a 14 percent return versus 5 percent for the S&P 500, JPMorgan expects 34 percent earnings growth in 2008 for the Internet stocks it covers versus 8 percent earnings growth for the S&P 500.

—In general, as broadband penetration continues to rise, so do e-commerce revenues:

—But advertising revenues actually outpace the adoption of broadband:

—Free cash flow at large Internet companies will keep going up, fueling M&A and share buybacks. JPMorgan estimates that free cash flow among just five of the top Internet companies (Google, Yahoo, Amazon, eBay, and Expedia) will rise from $8.8 billion last year to $12.5 billion in 2008. That is a lot of money for Web 2.0 acquisitions. Top acquirers Yahoo and Google, for instance, each spend about a third of their free cash flow on acquisitions.

—Search advertising will continue to dominate, rising from $22 billion globally last year to $50 billion in 2010. Here is JPMorgan’s forecast for the U.S. search advertising market (it expects global search revenues to rise 38 percent in 2008 to $30.5 billion):

—And here is its forecast for the U.S. graphical advertising market. Average CPMs for online ads, which bottomed in 2007 at $3.31, will start to rise again (see table below):

—As global GDP continues to grow faster than U.S. GDP (3.9 percent versus 2.2 percent in 2007), Internet companies with global reach will benefit. Amazon, eBay, and Google all get about half their revenues from international markets. Yahoo gets only a quarter of its revenues from abroad.