TripAdvisor Trumps Yelp for Now

NEW YORK (TheStreet) -- I'm a fan of Yelp (YELP) and wrote about it on Dec. 10. Yelp offers a lot more than just reviews on places to eat. But I like TripAdvisor (TRIP) better when I look at the charts, as you will see.

Yelp cuts to the chase with info about, among other things, shopping, food, nightlife, arts and entertainment, local flavor and public services and government. In many ways it's a lot like TripAdvisor, which was started in 2000, four years before YELP. TripAdvisor has had a head start in establishing loyalty and a brand name with customers. 

But there are demographic distinctions between TripAdvisor and Yelp.

TripAdvisor has more of an appeal to that large group of Americans between the ages of 45 and 70. By adding four years onto the front and back ends of the classic Baby Boom generation, you have a target audience of more than 80 million people. For the first 13 years of the 21st century, they've been used to going to TripAdvisor to see if a motel is fit to sleep in or an eatery has food worth consuming.

The company's travel research platform aggregates customer reviews and opinions of members about destinations, restaurants and accommodations such as hotels, bed and breakfasts, specialty lodging, and vacation rentals. TripAdvisor also has other activities through its various TripAdvisor-branded Web sites.

These include tripadvisor.com in the U.S. and localized versions of the Web site in 30 countries, including China under the brand daodao.com. In addition, it manages and operates Web sites under 20 other travel media brands, providing broad travel planning resources. TripAdvisor also licenses its content to third parties, which is also a profit center for the company.

TripAdvisor-branded sites include the travel community throughout the world, with approximately 260 million unique monthly visitors, and 100 million reviews and opinions covering approximately 2.7 million accommodations, restaurants, and attractions.

If you're not convinced how lucrative TRIP's business model is or the potential upside for its stock, just look at a company named Priceline.com (PCLN).

One of my favorite charts is the 10-year price chart for Priceline. Oh what a beautiful sight, and very few imagined in 2006 or 2007 that in 7 years shares of PCLN would trade as high as $1,198.

PCLN Chart
PCLN data by YCharts

Some day the chart for TripAdvisor just might resemble the chart above. The same could be said for YELP, and that's why Jim Cramer recently wrote, "Yelp has this remarkable business model of user-generated content married with salespeople who try to get customers to advertise their wares so that you can find them easily, or order from them after you read a review."

Jim went on to call Yelp "the online, mobile Yellow Pages and it, too, is a license to print money. Unlike the phone companies, where growth was always hampered by regulation, there is no regulation for Yelp and it can expand worldwide with the same business model and the same fast-move advantage."

If Yelp is like the online, mobile Yellow Pages, TripAdvisor is the online, mobile version of the most successful travel clubs for boomers including AAA, AARP or The Good Sam Club. That's part of the reason the 25 analysts who cover TRIP are looking for sales growth and revenue to increase by over 20% per quarter.

Investors would be wise to listen to the company's earnings conference call on Feb 11.

I'll close with a chart that compares the stock price history of both TRIP and YELP. You'll see how similar both stocks have performed. The winner over the next year or two based on the chart below is too close to call, but so far TRIP trumps YELP.

TRIP Chart
TRIP data by YCharts

At the time of publication the author had no positions in any of the other companies mentioned in this article.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of www.ChecktheMarkets.com.

Courtenay holds a Master's of Science degree in Psychology from California Polytechnic State University, and is a former senior vice-president of Investments for two major brokerage firms. He's been a fiercely independent investment "investigator" and a consulting contributor to the investment publishing world for over 30 years. In addition to his role as an investment publisher and analyst, he serves as a marketing consultant to the investment media industries.

In his role as a financial writer and editor, he specializes in unique investment strategies, growth with income stocks, overlooked investment themes, tax-advantaged themes, risk management, technologies to capture gains and reduce losses, real estate related opportunities,effective wealth preservation techniques, and the use of ETFs for diversification and asset allocation. He also follows and frequently writes about technology, health sciences, energy and resource companies. Because of his training and background in Clinical Counseling and Psychology, he enjoys writing about investor behavior, the herd mentality, how to turn investment mistakes into investment breakthroughs and the stock market's behavioral trends and patterns.

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