Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Expedia Q1 2014 Earnings Call. [Operator Instructions] This conference is being recorded today. And at this time, I'd like to turn the conference over to Alan Pickerill, Vice President, Investor Relations. Please go ahead, sir.

Thank you. Good afternoon, and welcome to Expedia, Inc.'s financial results conference call for the first quarter ended March 31, 2014. Pleased to be joined on the call today by Dara Khosrowshahi, Expedia's CEO and President; and Mark Okerstrom, our CFO. The following discussion, including responses to your questions, reflects management's views as of today, May 1, 2014, only. We do not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to today's press release and the company's filings with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements. You'll find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in our earnings release, which is posted on the company's IR website at ir.expediainc.com. I encourage you to periodically visit our Investor Relations site for important content, including today's earnings release. Finally, unless otherwise stated, all references to cost of revenue, selling and marketing expense, general and administrative expense, technology and content expense, exclude stock-based compensation and depreciation expense, and all comparisons on this call will be against our results for the comparable period of 2013. With that, let me turn the call over to Dara.

Thanks, Alan. We're pleased with the solid first quarter performance and a good start to the year. From a geographic perspective, revenue growth was healthy across all the major regions. Outsize gross bookings growth of 29% was driven by continued strong performance at most of our major brands, in addition to the gross bookings generated through the Travelocity implementation. From a brand perspective, Brand Expedia continued to deliver strong top line performance despite tougher comps, as it continues driving innovation on its new technology platform. Hotels.com had healthy gross bookings growth and launched their new largest-ever integrated U.S. brand campaign called Captain Obvious, which is off to a good start, obviously, otherwise, I wouldn't mention it on this call. Hotels.com's loyalty program, Welcome Rewards, continues to do very well, with an increasing number of members driving a higher mix of gross bookings. Egencia and EAN, our private-label business also posted good results for the quarter. Near-term results continue to be challenging for Hotwire, but we're investing aggressively in growing our mobile channels, improving our supply and analytical capabilities, and are confident that the team is executing on the right plan that will get the business back to growth. Just a quick update on the Travelocity implementation. The rollout has been going well and the early results are encouraging. Travelocity Canada just launched this week, and the teams will continue to enhance and optimize the sites to improve conversion and add a few remaining products. Overall, the speed of this implementation and the success we've seen are strong evidence of the strength of our execution, technology and teamwork. From a product perspective, we saw healthy hotel room night growth, essentially consistent with the growth we posted in the fourth quarter, with the positive impact from Travelocity largely offset by the shift…

Thanks, Dara. Overall, the results for the first quarter were slightly better than we had expected for both revenue and expenses. Disciplined expense growth in cost of revenue, technology and content and general administrative expenses again allowed us to invest aggressively in selling and marketing to drive solid top line trends and deliver slight adjusted EBITDA growth in a quarter that we had originally expected to be down year-over-year. In hotel, room night growth of 24% consisted of domestic growth of 20% and international growth of 27%. Travelocity added just under 3 percentage points of room night growth, the majority of which we estimate was offset by the shift of Easter into the second quarter. And note that the Travelocity bookings were 100% U.S., and as such, had a disproportionate impact on our domestic trends. Revenue per room night was down 10% year-over-year in the first quarter, driven primarily by the same 3 factors we have been discussing now for a while: expansion of our supply portfolio, including efforts to rollout ETP; improved inventory availability and adjust margins to account for specific market conditions; growth of our loyalty programs, along with discounting and couponing; and lastly, overall geographic mix, as we continue to build scale in international markets where unit economics and margins are lower. Note that all of these efforts are specifically designed to improve our customer experience through broader selection and choice, as well as competitive prices, in order to increase the likelihood that travelers will return to our brands as loyal customers, driving unit growth, scale and efficiencies over the long term. Advertising and media revenue grew 116% in the first quarter, adding over $50 million of revenue, with trivago driving most of this growth along with the strong performance for Media Solutions. Air revenue grew 28%…

[Operator Instructions] Our first question comes from the line of Justin Post with Bank of America Merrill Lynch.

A couple of questions. I don't know if you called it out, but maybe you could call out the Travelocity contribution to total bookings. I'm sorry if I missed that. And then, Dara, bigger-picture question. Several years of technology investment in the platform, where are you with that now? Do you think you've closed the gap versus peers? And then as far as like managing during the quarter, do you have better visibility now and are able to make adjustments more on the fly, so maybe less surprises? Pretty consistent results this quarter with last quarter.

Sure. So on Travelocity, we didn't disclose the gross bookings number. It did add just under 3 percentage points of global room night growth and about 18 percentage points of air ticket growth. This should help you approximate the number. And I would just remind you that Travelocity has a heavier air bookings mix, so there would be a disproportionate impact on gross bookings relative to revenue.

Yes. And in terms of our investment on our technology platform, listen, we're very happy about where we are as far as the technology capabilities go across the board as a company. And I think the -- as I mentioned in my remarks, the parts of that you see are the website themselves, but our investment has gone much deeper into the core platforms. And I think at this point, we're at a place where we can continue to roll out new feature sets, whether they're customer-facing feature sets, supplier-facing feature sets, et cetera, while at the same time, continuing to make the kinds of platform investments, reinvest in our platforms so that we don't get into the situation that, frankly, we got into 5 years ago. I think we're at a very, very good place here. There are parts of the business that are still really aggressively investing in technology. trivago is increasing their investment; Egencia, as it integrates; and VIA continues to pretty aggressively invest in technology and appropriately. But I think we've seen the results that we've seen on our consumer sites. We're encouraged. And our execution is getting consistently better across the board. And I do think that you're seeing it on the results. The results have improved. And as you've said, the results in general have gotten more predictable. We're sometimes subject to the vagaries of the market, if there are significant changes in the competitive environment, et cetera, but we do feel like we have a lot more tools at our disposal. And the business is feeling much more like business as usual, which as far as I'm concerned, is great. And I'd say our confidence as a team in our ability to execute is much higher now than it was 2, 3 years ago.

Our next question is from the line of Naved Khan with Cantor Fitzgerald. Naved Khan - Cantor Fitzgerald & Co., Research Division: Yes. So just on your room night growth, Dara, can you give us some color on room night growth for different geographies between EMEA and Asia Pac? And then, as for the total properties you had, it seems like you added 30,000 properties in the last quarter alone. Is that sort of a run rate you expect to see for some quarters moving forward?

Yes. As long as the room night growth goes, the room night growth is pretty consistent, as it was last quarter, in that the U.S. room night growth was quite solid. It was aided by Travelocity coming into the mix. EMEA room night growth continued to be healthy, and then Asia Pacific room night growth was at very strong levels, along with Latin America as well. So we aren't seeing any significant changes one way or the other as far as the room night volumes and where they're coming from. It's pretty predictable. And we're really happy to see the strength that we're seeing domestically and internationally as well. As far as our total number of properties that we've added, a fair amount of those properties were coming in from eLong. We're integrating the eLong inventory into our mainline inventory, and we'll continue to do so. We are, in general, losing hotels on the GDS side and adding them onto our ETP and other platforms. We do expect that, this year, the contribution that we are getting from new hotels added to the system is going to increase significantly on a year-on-year basis. So I think you will see that as the year goes by. We think that new hotel adds are going to be a bigger part of our business going forward and we like where we started, although it's early. Naved Khan - Cantor Fitzgerald & Co., Research Division: And in terms of the dynamics of hotels sort of dropping on the GDS side and being added more on the ETP side, are these the same properties or -- can you speak to that a little bit?

I think it depends. We often see our big GDS producers, we're able to go to them and offer up much stronger merchandising capabilities, packaging capabilities, et cetera. So very often, we're moving them over from the GDS over to our systems. And it's a big win for the hotels, and obviously, it's a big win for us.

Our next question is from the line of Ross Sandler with Deutsche Bank.

Just a follow-up on the room night growth, so the 24% average and 20% domestic. Can you give us a little color on -- as you mentioned the 3-point benefit from Travelocity and the 3-point headwind from Easter, but we also are comping the slowdown from Hotwire from the beginning of last year. So can you just give us a little more color on maybe, at the brand level, what's outperforming or underperforming the prior trend line, given the easy comp with Hotwire?

Sure. So I mean, the 2 biggest factors were the ones we called out, Travelocity and Easter offsetting themselves. From a brand perspective, I would say, quarter-to-quarter, pretty consistent trends this quarter to what we saw last quarter across the portfolio. I think that the Hotwire comp will get incrementally easier as we move from Q1 into Q2. It really won't get purely clean until Q3. So that's a bit of a headwind for us. And then the other headwind to keep in mind, although trends continue to be very strong at Brand Expedia, is that we were ramping up on the new packages platform last year in Q1 and into Q2. And so that's an incremental headwind as well. But I think the important message is that, broadly speaking, trends were consistent this quarter to what we saw in the prior quarter across the portfolio.

And then as we look into 2Q, you got the swing factor of Easter now benefiting the second quarter, that could be 3 to 6 points potentially, and the easy comp with Hotwire. So you could see a much more meaningful re-acceleration, potentially, north of 30% in the second quarter. Is that the right way to think about it?

Well, I would say that Hotwire is actually a headwind for us until Q3. It was -- performance was, I would say, on the way down in Q1 and continued into Q2. And actually, some of the bigger challenges we saw were in fact in Q2. And so, whether that and Easter completely offset each other or not, I'm not sure. But we wouldn't expect a net good guy in Q2. And then I would just remind you what we said or what I said on the last call with respect to Q2, which was that we -- despite the fact that the Street's expectations were higher than ours, we broadly hit our bottom line objectives for Q2, with the exception of some incremental investments in eLong and trivago that we made, and we called out $13 million on a year-on-year basis. And those are brands that we continue to invest in. So we don't expect that Q2 is a particularly easy comp for us on the bottom line. I think we do have some easier volume comps, just given the TripAdvisor transition that started really dropping in, in the second quarter.

Okay. And if I can squeeze one more, I'm sorry. But the TripAdvisor spend in the quarter, I don't think you guys broke it out. What was that?

Yes, we're not going to break out our spend by channel broadly. You can see that, in general, our sales and marketing spend overall was up significantly on a year-on-year basis. And our strategy has been to invest aggressively in variable channels. So you can come to your own conclusions as it relates to TripAdvisor, but we're not going to be breaking out channels specifically.

Yes. And Ross, just specifically on the disclosure this quarter. Effective into the future, TripAdvisor is no longer going to be treated as a related party for disclosure -- financial disclosure purposes. And this is a result of the ownership and governance changes that we saw in late 2012 and into 2013.

Your next question's from the line of Tom White with Macquarie.

My question's on Travelocity. And I realize it's still a little bit early since the implementation. But relative to their marketing activity, I'm just wondering, do you guys have any visibility there? And are you in touch with them about kind of their marketing strategies or objectives or timing? Would their willingness to spend marketing dollars in a given period impact your appetite to do so in any way?

Yes, we are -- Travelocity is very much an independent entity as it relates to their marketing spend. So we have very little visibility into what their marketing strategy is. Obviously, we talk to them. But it is a real third-party relationship. And so we see the effects of their marketing spend after the fact. After they spend it, we'll see more visitors, we'll see more transactions or not. So really, we do have some limited visibility there. So far, the implementation has been going well. So far, we hear from Travelocity that they're happy. And obviously, our technology platform and our supply base seems to be converting quite well for them. But other than that, we have quite limited visibility into what's going on down there.

Our next question comes from the line of Douglas Anmuth with JP Morgan. Douglas Anmuth - JP Morgan Chase & Co, Research Division: I just want to ask you a couple of things. First just on ETP, if you could update us on the progress there. And I may have missed it, but if you could talk more about the upticks that those properties are seeing in terms of room nights and how you're managing the incremental demand there, just as hotels want to increasingly shift over? And then second question, just regarding Room 77 with Google, if you could comment on how you're thinking about that partnership from a competitive perspective, but then also, perhaps, of course, as you're -- seem to be an investor in Room 77 as well.

Great. Thanks, Doug. So for ETP, it's really transitioned into business as usual for us, and it's really transitioned into our primary form of contracting new hotels and our primary form of relationships. 2013 was a year where we transitioned a whole lot of new relationships over to -- our existing relationships over to the ETP contract. And I think we ended the year with about 45,000 hotels live. And really, in 2014, it's just about, as new contracts come up for renewal, putting hotels on those contracts and as we sign up new hotels, putting them on the ETP platform, I would say, broadly speaking, for our consumers and for our suppliers, ETP has been and we expect will continue to be a huge success. It's really removed a lot of the barriers that we historically had with going with the pure merchant model, barriers that consumers felt, barriers that suppliers felt, and really have opened up our platform. Specifically, just in terms of some of the impacts that ETP has driven to our business, really best shown through the growth in our non-eLong agency room nights. Last quarter, we disclosed that the room night mix for the non-eLong Hotel Collect or agency room nights was over 15% and growing at rates over 100% year-on-year. And we actually saw metrics broadly consistent with that in the first quarter this year as well.

And as far as our investment in Room 77, the investment that we did have in Room 77 was pretty small in the grand scheme of things, so we don't have any particular insights as to that acquisition and discussions that happened behind the scenes and/or Google's strategy. If you level up a bit, Google has been investing in their hotel search experience for some period of time in the HPA product, as well as their other mobile products. So their investment in Room 77 and the team there certainly makes sense from a thematic standpoint. And that Room 77 had, we feel, built a nice travel search product, a nice hotel search product. So it fits along that theme, as far as Google's investments go. As long as we are able to work in partnership with Google and are able to competitively bid for their travel search volume, not just hotel search volume, we think we can continue to build our partnership with Google. And at least so far, we don't see any reason why we won't be able to be competitive in the very large Google marketplace on a go-forward basis.

Our next question is from the line of Eric Sheridan with UBS.

I guess, now that you've had some time with the partnership with Travelocity, I want to understand if there was any update on the way in which you think sort of the run rate benefit to EBITDA might be, once you have sort of a full 12 months of full implementation, not this year, but further beyond. Second question on the guidance, with EBITDA coming in slightly better than the way you had talked about Q1, curious about maintaining the guidance at the 13% to 16% and what we might be looking for on the investment side for the rest of the year.

Thanks, Eric. So with respect to Travelocity, we're not giving an update. It's really just too early for us, for one. Secondly is, on the last call, I went through a number of the unknowns, if you will, around where that lands. Implementation, I think, is better known now than, certainly, it was the time of our last call. But what they spend on sales and marketing and the ultimate conversion of the websites are still an unknown for us. So we have no updates. Our full year guidance does include our expectations for Travelocity. Our next year guidance will include our expectations for Travelocity. And with the exception of some incremental disclosures that we'll make, similar to what we did this quarter around the impact on some operating metrics to help the investment community and our shareholders understand what's happening with the core business, we don't plan to give specific disclosures around Travelocity, similar to the way we treat our own owned main brands. With respect to our full year guidance, listen, all I'd say is that Q1 is a relatively tiny quarter for us, particularly on an adjusted EBITDA and net income level. And so a slight beat versus our expectations results in a de minimus change to our full year outlook. And certainly, we, at this point, are not -- have not changed our outlook on the business and our guidance remains the same.

Our next question comes from line of Mark Mahaney with RBC Capital Markets.

Two questions, please. I want to follow up on Doug's question. And maybe there was some commentary or controversy intraquarter about Google and hotel product finder. Can you just comment a little bit more on whether you think there's any of the things that Google is doing, like hotel product finder is changing the economics -- unit economics for online travel agencies? And then secondly, can you talk big picture about alternative accommodations? And I know you've got a -- you've been working on an implementation with Home Away. Your thoughts on -- if they've changed at all, on how interesting that market could be to Expedia over the next 3 to 5 years?

Thanks. As far as Google's hotel product finder, listen, they are -- Google is constantly testing and learning, and they are making all kinds of changes now. Obviously, because of the market share that they have, any changes that they make can have significant downstream effects on partners of theirs, such as ourselves. I'd say the greatest worry that we have with Google in general is not specific to hotel product finder, but it's in general, with the amount of space that they give to other third-party sites, such as ourselves, both on paid and unpaid basis, relative to the amount of space that they give internally. And in markets where they're dominant, which are many markets, this can be a real issue for any one -- any website that really wants to have any kind of share on the Web. That said, we have a partnership with them. We build our partnership with them. They are -- and as they make changes, we adjust. And because of the status of our technology, et cetera, we're able to adjust that faster. So this quarter, we haven't seen anything material that changes our trends overall that we haven't talked to you about previously. As far as alternative accommodations go, we're early in the partnership with Home Away. We're very hopeful in the partnership with Home Away. And right now, we're working collaboratively to optimize the pilot going forward. There's some technology work that they have to do and we have to do in order to essentially connect more of their hotels into our system. Right now, there's a minority of their hotels that -- not hotels, properties that are bookable that we can book through Expedia. And the work that's being done, both by their teams and our teams, is to essentially wire up more of their properties. As we wire up more of those properties, I think we'll have a better sense as to how big alternative accommodations can be. But at this point, we're optimistic.

Our next question is from the line of Ron Josey with JMP Securities.

So Mark, I just want to follow up. I think you said one quarter -- first quarter results are better than you all had expected, both on revenue and expenses. And on the revenue side, I was just curious, was the better-than-expected due to Travelocity, or just a better overall travel environment? And then a quick follow-up.

Yes, I would just say broadly across the board, we saw strength in the business. I think Travelocity is, as you probably gathered from our remarks, pretty tough for us to forecast. So that was a bit of it. But broadly, the business has performed a little bit better than our expectations. Brand Expedia we knew was comping over -- starting to lap over the launch of the package product, and that continued to grow at healthy rates, notwithstanding the tougher comp. So it was broadly felt. With respect to the overall travel environment, it's hard for us to perceive the overall macro trends, just given the fact that we operate in a segment of the market which is growing faster than the overall market, and we think that we're taking share in that segment. But broadly, from what we see and read, which is similar to what you can get access to, the travel market remains pretty healthy: healthy in the U.S.; Europe continues to be, I would say stable to improving; APAC and Latin America are mixed bag. But broadly, we'd say it's a healthy travel environment.

And I guess, Ron, putting it the other way. When you look at last year, we had some pretty difficult headwinds with Hotels.com and Hotwire. There were negative surprises that we had to scramble to recover from. And I think in the second half of the year, we recovered from them pretty effectively. And so far, this quarter has been a pretty boring quarter as far as surprises go, which we're quite happy about. And if the trends continue on a go-forward basis, I think we're set up for a pretty good year. I think that we're going to see lots of competition on the brand marketing side, especially for the summer booking season. So we're certainly prepared for that. But so far, so good. But it's just 1 quarter and we have a long year ahead of us.

Our next question comes from the line of Michael Millman with Millman Research Associates.

Following up on, I guess, the Home Away. Are you seeing any pushback from either hotels and/or regulators regarding that business? And secondly, you put out, or at least Expedia put out a survey for what's expected at Memorial Day, air up 5%. I was just wondering if you could also give us what you expect European rooms to be up and what you expect rental car prices to be up in U.S. and Europe. And related, what -- are you seeing any changes in rental car availability in the U.S. in -- for the second quarter?

Absolutely. So as far as Home Away goes, we haven't seen any pushback from our hotel partners or regulators. I know that there's been a significant amount of controversy around Airbnb and regulators there. I think Home Away has been in business for a much longer time. And from at least what I'm aware of and what we're aware of, has their regulatory marks right on target and isn't seeing any significant push one way or the other. So for now, we're quite happy with the partnership and we hope to build that partnership. We think that complementing our hotel inventory with a vacation rental inventory is only going to be good for consumers. And that's really our goal, is when a consumer searches for Orlando, to give them the most complete set of listings possible. And we think Home Away adds to that and adds to the consumer experience. As far as our -- the surveys, et cetera, those surveys are largely consumer-oriented in order to get kind of consumers looking and booking for travel. As it relates to earnings and financial performances, we typically don't make those predictions. So the general prediction or general observation that I would make is that the travel business, on a global basis, there are ups and downs, obviously. Locally, the travel business has recovered nicely. Most of the airlines that are reporting, the hoteliers that are reporting, the car rental companies that are reporting, are doing well, and we are doing well with them in partnership with them. As far as car goes, in general, we're seeing our car trends improve on a year-on-year basis, kind of Q1 was better than Q4. And we are seeing the suppliers try to up prices a little bit on the car side and with some success. And in general, we're seeing pretty good trends on the car side, at least as it relates to our brand scope.

When you say pretty good, it means good demand, lots of availability?

I'd say good demand, good availability, good transaction trends.

Our next question is from the line of Mike Olson with Piper Jaffray.

This is Andrew Connor on for Mike. Dara, I know you guys have had a lot of success with mobile. Your rankings in the App Store are very good. Are you guys able to give like a mobile bookings penetration number? And then I had just a quick follow-up.

Yes. In general, as far as our mobile penetration goes, for the brands who are active in mobile, we have in excess of 20% of our transactions on mobile. Hotwire is actually trending up very, very significantly, over 30%. So I'd say the penetration numbers and the trend numbers in mobile are good across the board and are improving across the board. We're very, very happy with the quality of our apps. We continue to drive app downloads aggressively. And we're interested in driving our mobile app business, as well as our mobile Web business, on a global basis. And so far, mobile has been a very nice tailwind for us.

And have you guys seen the behavior sort of shift toward longer lead times?

At this point, mobile still continues to be largely a last-minute type of activity -- not all last-minute, but last-minute is a very significant part of our mobile activity, continues to be. Tablet looks a lot like the PC. So tablet is certainly not last-minute, but the handset continues to be fairly last-minute focused.

Our next question is from the line of Brian Nowak with SIG.

I've got 2 questions. First one, Dara, I know in the past, you've talked about Hotwire stabilizing this year. It sounds like there's still a little bit of work to do in Hotwire. Can you just give us an update on how to think about Hotwire for the year? And when you say stable, do you mean flat or is there still more work to do to kind of keep that booking or revenue trajectory from declining this year?

Yes, Brian, I'll take that one. Hotwire essentially experienced, through Q1 and through Q2 of last year, what we would call a reset. It was a reset towards the new reality of the car industry that's more consolidated, new competitive reality with a large competitor introducing a comparable product. Since that reset, if you will, the business has stabilized and they are working towards implementing the strategy that we think is very sound. And you can see it with some of the mobile numbers that Dara shared with you. But it still faces difficult year-on-year comps until Q3. So it was down in -- it was down last quarter. It was down year-on-year this quarter. We would expect to see something similar, but easing in the second quarter. And then things will start to look a little bit better on Q3 and Q4. And on a full year basis, what we've said is we're not counting on Hotwire to contribute to our EBITDA growth story.

Got it. And then the one other one I had is any help on how much of the sales and marketing growth came from the Travelocity WebShare payment?

We haven't disclosed that. But the bulk of the sales and marketing growth continues to come from our core businesses, plus trivago. trivago, again, you've seen and we've disclosed on an inorganic basis, they added about 800 basis points to our sales and marketing growth. So that was a big driver. Travelocity was a factor, but then our core businesses, Brand Expedia and Hotels.com, on their new technology platforms, are spending aggressively, really funded by the discipline we've got around our overall cost base.

Our next question comes from the line of Kevin Kopelman with Cowen and Company.

Just a follow-up on Travelocity. You mentioned that it contributed 3% to room night. Given that's the first quarter, how fully ramped is that? I know you're just rolling out in Canada now. Should we expect that contribution to be similar next quarter?

Yes, the hotel path was live for the majority of the first quarter. We implemented that through the end of the fourth quarter. There was some optimization in the first quarter. That's going to continue, actually, throughout the year. So it is hard for me to -- yes, it's hard for me to know for sure whether that's a good proxy. I would call your attention, though, to the fact that in a ramping business, we do see a disproportionate impact on gross bookings than we do on the revenue or stayed room nights, which is the room nights we report. And therefore, the 3%, possibly, could be on the lower side, again, to the extent we're able to have [ph] those stays, and they will happen over the course of subsequent quarters.

Great. And then on advertising expense, you talked about competition in brand advertising. Can you give us any more color on how you're thinking about advertising expense growth for the rest of the year?

As far as our advertising expense growth, I think what you will see is pretty similar to what you really saw last year and the last couple of quarters. From a timing perspective in Q1, typically, we spend up very aggressively and some of the revenue comes in Q2. And this year, it will be, call it, augmented by Easter and the timing of Easter. But in general, all of our brands are aggressively marketing in the variable channels. We're growing our brand marketing as well. The variable channels, in general, are less efficient than the other direct channels. So we do expect to continue to see sales and marketing growth higher than revenue, especially with trivago being part of the family. All that sales and marketing activity, we think, is net profitable overall. And we have also talked about the financial model, where we use the leverage of our fixed costs, et cetera, to be able to deliver profit growth, even as we're aggressively investing in sales and marketing. So that formula continues, at least for the first quarter of the year. And hopefully, it's something that we can deliver for you for the foreseeable future.

There are no further questions at this time. I would now like to turn the conference back to Alan Pickerill for closing remarks.

Okay, yes. Thanks, everybody, for your interest in Expedia and for joining us on the call today. A replay will be up on the IR site shortly. Dara, any closing remarks?

No, just thanks, everyone, for joining. And thank you to the Expedia Inc. employees for a good start to the year, and we've got lots of work ahead of us, but looking forward to talking to you next quarter.

Thank you, sir. Ladies and gentlemen, this concludes the Expedia Q1 2014 Earnings Call. Thank you very much for your participation. And at this time, you may now disconnect.