Barton, Richard 1967–

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Richard Barton
1967–

Founder, Expedia, Inc., and director, IAC/InterActiveCorp

Nationality: American.

Born: June 2, 1967.

Education: Stanford University, B.S. (industrial engineering), 1989.

Family: Son of Jim Barton (a retired executive at Union Carbide) and Betsy (a homemaker; maiden name unknown); married Sara (an obstetrician and gynecologist; maiden name unknown); children: three.

Career: Alliance Consulting Group, 1989–1991, strategy consultant; Microsoft Corporation, 1991–1994, product manager, then general manager of Expedia unit, 1994–1999; Expedia, Inc., 1999–2003, president, chief executive officer, and director; IAC/InterActiveCorp, 2003–, director.

Awards: Named "One of the Best Managers of 2002" by BusinessWeek magazine.

Address: IAC/InterActiveCorp, 152 West Fifty-seventh Street, 42nd Floor, New York, New York 10019; http://www.usainteractive.com/index.html.

■ Richard Barton founded Expedia, Inc., a popular operator of online travel planning services, in 1994 and acted as its president, chief executive officer, and director from November 1999 to March 2003. The company was founded within the offices of the Microsoft Corporation and spun off into a separate unit in 1999. During his tenure at Expedia, Barton successfully established one of the few Internet companies of the late-1990s boom to actually make money for its investors.

DEVELOPING ENTREPRENEURIAL SKILLS

Born in the Midwest, Barton honed his entrepreneurial talents while growing up in New Canaan, Connecticut. After learning how to drive, Barton started a summer business by driving an ice-cream truck in New Canaan. He taught himself to price the merchandise, determine the daily route, and carry a large amount of inventory in ice cream and Popsicles for his customers. Later, for two years, Barton hired out as a golf caddy at the local country club.

Although his parents funded his college education, Barton supported himself for his other expenses. He hesitated at the large profit percentage that a painting company wanted from him, so he started his own company. During summer vacations away from college, Barton painted houses using his own multiple-person crew. Reflecting upon the experience in an interview in the New York Times, Barton said of himself, "It taught me how to run a business, hire people, manage clients, do quality work. I fell in love with running my own thing. And painting made me feel really good, especially when I was finished" (August 5, 2001).

JOINS MICROSOFT AND FOUNDS EXPEDIA

Before founding Expedia, Barton was employed by Microsoft from 1991 to 1994 in various product management capacities. He was involved in the research and development of such products as the MS-DOS 5, MS-DOS 6, Windows 3.1, and Windows 95 operating systems. He pushed (and eventually succeeded) in selling MS-DOS with a "DOS for Dummies" book even though it was published by a Microsoft rival. Barton felt novice computer users would be more apt to buy DOS if it came with an easy-to-read user's guide.

Later, while traveling on a CD-ROM work project to create travel guides—interestingly enough called Expedia—Barton came up with the idea of "e-travel," or using electronic resources to assist travelers. He informed Bill Gates, his boss at Microsoft, that he thought the CD travel guide project would fail but that his e-travel concept would succeed. Gates liked the idea, and Expedia, in its new form, was created. Barton began working on the concept in 1994.

Barton persuaded Microsoft to invest $100 million in order to make a group of personal computers do what in the past only a mainframe airline-reservation system could do—retrieve flight information and purchase a ticket. With this investment Barton and his team created software that allowed users the ability to build customized trips rather than to buy prepackaged ones, a key development that helped Expedia to rapidly grow its business.

Barton's success with Expedia was made possible by the company's approach to the hotel business. Instead of selling rooms on commission, Expedia bought them at a discount, using its growing size to negotiate low prices. It then resold the rooms to customers at a higher price, often packaged with airfares. Barton was very adept at using technology to constantly reduce the costs of the travel process.

Expedia first appeared on the Internet in 1996. At that time Barton imagined that Expedia would become the online destination for individuals who booked travel reservations—such as for hotels, airplane trips, and rental cars—from their personal computers. In addition, Barton developed other travel-related features for the Expedia Web site, including chat rooms, frequent flyer tracking tools, and maps. During this time Expedia bought two of its competitors, Travelscape.com and VacationSpot.com. These acquisitions were instrumental in helping Expedia to expand its customer service operations.

FROM EXPEDIA IPO TO SALE TO USA INTERACTIVE

In the fourth quarter of 1999 Microsoft spun off Expedia (while still maintaining a controlling interest) with an initial public offering (IPO) of $14 per share. The stock jumped 280 percent on the first day of trading, producing a market cap of $2 billion and making Barton a rich man. Shortly thereafter Barton told a reporter at BusinessWeek, "We've been driving this Ferrari in the suburbs. Now we're taking it out on the highway and seeing what it can do" (January 31, 2000).

In early 2000 Barton began to invest considerably in building a comprehensive merchant inventory and improving the company's computer system. According to Barton, Expedia's new searching and pricing system and related package business led to a dramatic increase in customers. As a result, revenue from merchant business nearly doubled from a year earlier, to about $67 million, while agency revenue grew about 88 percent to $34 million. This milestone, as Barton declared, was the direct result of travel-savey consumers seeking out Expedia's technology.

In July 2001 Microsoft agreed to sell control of Expedia for an estimated $1.3 billion to 's USA Interactive, the cable television company. (USA Interactive later operated under the name IAC/InterActiveCorp.) With the help of Expedia's new parent company, Barton expanded Expedia to what he called a "travel superstore on the Internet," one that sold everything from discount air fares, vacation packages, and island hideaway rentals to tickets to professional sporting events. Under Barton's guidance, Expedia expanded from 50 original employees to more than 1,300 worldwide in 2003, while going from several offices at Microsoft headquarters to its own building in Bellevue, Washington, along with worldwide sites in Las Vegas, Canada, Britain, Germany, France, Italy, and the Netherlands.

MANAGEMENT STYLE

Expedia's success was in large measure due to Barton's imagination and leadership. Some industry analysts, such as those with Bear Stearns, praised Barton's vision and his ability to steer Expedia to profitability in an era of Internet company failures. At the same time, colleagues remarked on his good interpersonal skills and ability to motivate his employees. Barton's former boss at Microsoft, Brad Chase, who until April 2001 was a senior vice president with Microsoft, compared Barton to the lion, tin man, and scarecrow in The Wizard of Oz. Chase told Monica Soto of the Seattle Times, "He's sort of got the courage of his convictions and he's smart—he's got a brain. At the same time, he's got a heart. He cares about the people around him" (May 27, 2002).

Friends and coworkers described Barton as highly competitive and very passionate, sometimes forgetting to put on his shoes before walking down the hallway. Passion sometimes landed Barton in trouble. Just after Expedia was spun off from Microsoft, Barton told a BusinessWeek reporter that Expedia would sell $1 billion in travel products by the year 2000. The statement was seen as an outlandish boost from the boss at the small ex-division within Microsoft. Expedia did meet that goal, but at the time Barton was politely asked to "tone" himself down when speaking to the press.

RESIGNS FROM EXPEDIA, MOVES TO PARENT COMPANY

Barton resigned as president and CEO of Expedia effective March 31, 2003. Barton left the company at the height of its financial earnings history, with the company having booked $5.3 billion in gross revenue for the 2002 calendar year. He listed personal reasons for his departure, specifically the desire to live in Europe for a year. In February 2003 he assumed a position on the board of directors at Expedia's parent company, IAC/InterActiveCorp. The InterActiveCorp position allowed Barton to continue his involvement with Expedia. Barton also served on the board of directors of Ticketmaster, Netflix, and AtomShockwave.

See also entry on Expedia, Inc. in International Directory of Company Histories.