Expedia and its Trivago unit agreed to explore a Trivago initial public offering and have the goal to complete it before the end of 2016, Expedia announced yesterday.

Dara Khosrowshahi, the CEO of Expedia Inc., which has a controlling stake in the Germany-based hotel-metasearch company, noted that Trivago’s revenue has been growing at a faster clip than when Expedia successfully spun off TripAdvisor in 2011.

Trivago increased its revenue 41 percent in the second quarter to more than $200 million. On a trailing 12-month basis, Trivago’s revenue was more than $600 million.

Expedia had an option to increase its stake in Trivago but the two companies agreed to pursue an IPO instead, officials said.

“Neither Expedia nor the Trivago founders exercised their option under the open put/call window this year and we have instead agreed to explore the feasibility of an IPO of Trivago shares with the preliminary and ambitious goal of completing the IPO before year end,” Khosrowshahi said. “An IPO would allow investors to value Trivago as a separate standalone company.”

“Note that this is an IPO and not a spinoff [like TripAdvisor was]. “Expedia does not plan to sell any of our shares in an IPO and there are no guarantees that an IPO will ultimately be pursued or be successful. The put/call window could reopen in March 2017 if an IPO is not completed by then.”

Trivago has been a growth engine for Expedia and now it intends to create greater shareholder value by executing an IPO.

Photo Credit: Trivago's advertising campaign has blanketed markets with its message around the world.