Expedia CEO Mark Okerstrom and CFO Alan Pickerill have resigned following a conflict over the company’s strategy, the company said in a press release on Wednesday (Dec. 4).
Barry Diller, chairman of the board, and Peter Kern, vice chairman and director, will oversee the company's executive leadership team. Eric Hart, chief strategy officer, will serve as acting CFO. The role of Ariane Gorin, president of Expedia Partner Solutions, will expand as president of Expedia Business Services.
“Ultimately, senior management and the Board disagreed on strategy,” Diller said. “Earlier this year, Expedia embarked on an ambitious reorganization plan with the goal of bringing our brands and technology together in a more efficient way. This reorganization, while sound in concept, resulted in a material loss of focus on our current operations, leading to disappointing third-quarter results and a lackluster near-term outlook.”
The company is in the midst of a broad reorganization and plans to streamline its inventory of brands. Diller added that Okerstrom’s 13 years at Expedia “greatly benefited the enterprise.”
Kern said the company is focused on the future and is aiming for growth in revenue and margins, adding “... we intend to use our strong balance sheet to continue and amplify our stock repurchase program, given our belief that the market currently undervalues our company.”
Shares of Expedia climbed as much as 8.6 percent in early trading following the announcement, CNBC reported.
Diller distributed a memo to employees, calling the leadership changes an “unfortunate and difficult situation” but also a “new beginning” for Expedia. Diller and Kern will address employees about the shakeup at a town hall meeting in Seattle on Dec. 19.
Overall, Expedia shares were down 6.9 percent this year. Third-quarter results were also discouraging. Okerstrom pointed to poor ranking in Google search and weak revenue for the earnings miss.
Startups are moving into the travel industry, which is the fastest-growing segment in the tourism market. Travel industry research company Phocuswright has predicted that turnover in the tours and activities market would reach $120 billion this year, with more than a third spent with Asian suppliers.