Talking Points: Dara Khosrowshahi

As CEO of Expedia, Dara Khosrowshahi presides over the world’s largest online travel business with $3 billion in revenues in 2009 and a growing treasure trove of popular travel sites including TripAdvisor, Hotwire and Hotels.com.

Coming to America: I came to the States with my family in 1978 during the Iranian Revolution when I was 9. I thought all those channels on cable TV were really cool. I didn’t notice that we moved from a mansion to a little condo. We had the comfort of family and food on the table. The U.S. is a welcoming place for people who didn’t grow up here.

Maintaining an Iranian identity: It was an ironic reversal. When we were in Iran, my parents wanted us to go to college in the States. So, at the dinner table, they insisted we speak English. We hated it. Then, in the States, our parents insisted we speak Farsi. We would say, “Do we have to speak Farsi? Nobody speaks Farsi here.”

Switching careers from engineering to investment banking: I had a great [engineering] training program in Kentucky lined up, but my girlfriend lived in New York. Love won the day. I joined Allen and Co. [an investment bank focused on media] as head of strategy and planning. It set me off on my career.

Acquisitions: I’ve done 20 transactions in the five years I’ve been running [Expedia]. I’ve learned three lessons: First, keep it simple. When you need to put together a long argument to justify it, then too many things have to go right to make it work and you will probably have a failure. In real life, things always go wrong. Second, management has to be great. Our most spectacular home run deal was TripAdvisor. When we bought it [2004], it was going to do $10 million in cash flow and last year, it did close to $200 million. Steve Kaufer, the founder, took it all the way to where it is now. Third, go with your gut. There have been a couple of deals where it seemed right intellectually but it didn’t feel right in my gut, and I went forward with the deal and it was a disaster. 

The financial crisis: All of us were pretty panicked. The first thing the board asked us when the crisis hit was, “Is the company safe?”  [Fortunately] we’ve always been really conservative in terms of having enough cash to run the company. Once we could say the company was safe, we had the luxury to act in a rational manner.

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