Back in 2000, it was a small, independent company featuring user-generated travel tips; it is now the largest travel site in the world, measured by both content, and visitors. I'm one of them, and I use it frequently, reports Timothy Lutts, editor of Cabot Stock of the Month.

In 2004, TripAdvisor (TRIP) was purchased by conglomerate Interactive Corp (IACI), which spun off its travel businesses under the name of Expedia in 2005. In December 2011, TripAdvisor was spun off from Expedia in an IPO.

But all the while, TripAdvisor was growing, by acquiring smaller competitors and amassing more and more user-generated content (for free!).

TripAdvisor offers localized versions of its site in 30 countries. More than a billion travelers visited TripAdvisor's Web site during the first half of the year!

And today, in addition to its namesake Web site, the company also runs Airfarewatchdog, BookingBuddy, Cruise Critic, Family Vacation Critic, FlipKey, Holiday Lettings, Holiday Watchdog, Independent Traveler, OneTime, SeatGuru, SmarterTravel, Tingo, SniqueAway, Travel Library, TravelPod, VirtualTourist, and Kuxun.cn.

Revenue from click-based advertising accounts for 74% of TripAdvisor's revenue, while revenue from display-based advertising accounts for 13%. The remaining 13% comes from subscriptions, transactions, and other sources.

North America accounts for 54% of revenues, Europe, Middle East, and Africa region for 30%, Asia-Pacific for 12% and Latin America for the rest.

In the second quarter, TripAdvisor stopped offering pop-up ads and rolled out a new hotel metasearch display that's less intrusive and more effective. In addition, the company repurchased 675,000 common shares of its stock for $42.4 million—an excellent sign that management believes the stock is a good value.

Plus, the company is in the midst of four more acquisitions: Jetsetter, CruiseWise, Niumba, and GateGuru. In sum, the company is growing, thriving, well-managed, and set to get a lot bigger, for two simple reasons:

One, the world is its marketplace and there's enormous potential for growth, as people adopt middle-class lifestyles that include travel, particularly in China.

Second, the network effect will continue. More than a decade ago, when I looked at TripAdvisor, there wasn't much there. Today, it's an easily navigated, comprehensive resource. And no competitors are close.

The company's revenues and earnings are both growing rapidly, while after-tax profit margins are plump; the fact that the majority of the company's content is free is not to be underestimated.

Looking forward, analysts estimate that 2014 earnings will grow 30%. My guess is the company will do better, in part, because there will almost certainly be more acquisitions.

Technically, the stock showed upward progress since the December 2011 IPO, interrupted by a big correction from July through October of 2012. But the stock has been beating the market since then, as more and more institutional investors come to recognize the company's great growth prospects.

Most recently, we saw the stock hit a high of $82, and then fall heavily after the CEO told analysts that business this summer had been bumpier than expected, and that traffic was below the company's target.

That selling brought the stock down from the stratosphere, and led to the building of a two-week base in the $70 area, which is where it sits today, 14% off its high. Meanwhile, the stock's 50-day moving average is nearing $68, and thus is very likely to provide support in this area. I recommend buying now.

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