Expedia

"Our business model was hardly an earth-shattering innovation; we just followed Expedia’s model, by first creating content, then relying on hotel room and ticket bookings to take profit. That was an era when a good business plan was enough to attract financing. Our plan was not as exciting as a web portal but with the impressive qualifications of the four founders we were able to get some venture capital. The first tranche came from IDG, and from this beginning they’ve invested in the three enterprises I participated in founding: Ctrip, Home Inn and Hanting hotels. It just goes to prove that even in a crazy era there are smart people who understand what’s going on."

"Some of our ventures led, some fizzled. But the ones that led were blockbusters. One that still leads is Expedia. I thought travel was the perfect business to be colonized by the internet. We found and bought a fast-growing but still small company called Hotel Reservations Network based in Dallas. It owned the name Hotels.com, and it was our first foray into online travel. Microsoft had also started an online travel service called Expedia, which by 2001 was getting some traction. After the dot-com bubble burst, I went to see Steve Ballmer, then CEO of Microsoft, on a mission to persuade him to sell it to us. It was still losing money and Steve felt Microsoft shouldn’t be in these internet verticals anyway and quickly agreed to let us have it in exchange for $1 billion of our stock. We were set to close the deal in October 2001 when you-know-what happened on September 11 and travel ceased to exist. We had an out clause in our deal for a “material adverse change,” and 9/11 was certainly that. We thrashed around for weeks asking ourselves how we could pay $1 billion for a travel service when there was no traveling. One day, as we were stewing around, someone in the room said, “If there’s life, there’s travel.” That rang loud enough for me to say, “That’s it—we’re betting on *life,*” and we closed the deal."