Online travel platform offering bookings for flights, hotels, vacation rentals, and activities.Yahoo Finance ↗expedia.com ↗
2 takes · first discussed Oct 18, 2024
Every call, plotted at the price the day they made it.
Chamath argues Expedia is a fragile UI layer over commoditized data that is highly vulnerable to AI agents like Perplexity executing travel bookings directly, making it a terrible $30B capital allocation for Uber.
Friedberg sees a financial rationale for Uber acquiring Expedia at ~4x pro forma EBITDA after cost synergies and cross-selling, but acknowledges significant long-term AI disruption risk to Expedia's core business model.
The hosts are divided on Expedia, though both acknowledge meaningful AI disruption risk to its business model. Chamath is bearish with high conviction, characterizing Expedia as a fragile UI layer sitting atop commoditized travel data that AI agents like Perplexity could easily bypass by executing bookings directly with airlines and hotels — making any large acquisition, such as a rumored Uber deal, a poor capital allocation. Friedberg takes a more mixed view, conceding the long-term AI threat but seeing a near-term financial case for acquisition at roughly 4x pro forma EBITDA (~$22B enterprise value) after cost synergies and cross-selling opportunities. The core disagreement is whether the short-term financial attractiveness of the deal outweighs the structural vulnerability of Expedia's core business — Friedberg says it can be rationalized financially, while Chamath views the underlying business as fundamentally at risk regardless of price.
Chamath argues Expedia is a fragile UI layer over commoditized data that is highly vulnerable to AI agents like Perplexity executing travel bookings directly, making it a terrible $30B capital allocation for Uber.
I cannot think of a more fragile business model than the UI layer on top of widely available data... in the example of flight bookings, you could go directly to United because Perplexity will just show you all of the flights... and then”29:37
Friedberg sees a financial rationale for Uber acquiring Expedia at ~4x pro forma EBITDA after cost synergies and cross-selling, but acknowledges significant long-term AI disruption risk to Expedia's core business model.
if you can bump the EBITDA up to $6 billion a year... you're kind of paying about $22 billion enterprise value... that's a pretty low multiple. I mean, you could kind of see yourself rationalizing this just from a financial basis that”33:50