##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File No.:
    000-50171
  TRAVELZOO INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
   Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

36-4415727(I.R.S. Employer
    Identification No.)590 Madison Avenue, 37th Floor,
    New York, New York(Address of Principal
    Executive Offices)

10022(Zip Code)   Registrants telephone number, including area code:
 (212) 484-4900
  Securities registered pursuant to section 12(b) of the
    act:
 None
  Securities registered pursuant to section 12(g) of the
    act:
 Common Stock, $0.01 Par Value
 (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K




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##### 





TRAVELZOO
    INC.
  Table of
    Contents
   
 PagePART IItem 1.

Business


2Item 1A.

Risk Factors


9Item 1B.

Unresolved Staff Comments


16Item 2.

Properties


16Item 3.

Legal Proceedings


17Item 4.

Submission of Matters to a Vote of Security
    Holders


17PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


17Item 6.

Selected Consolidated Financial Data


19Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


19Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


32Item 8.

Financial Statements and Supplementary Data


33Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosures


55Item 9A.

Controls and Procedures


55Item 9B.

Other Information


56PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance of the Registrant


56Item 11.

Executive Compensation


57Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


57Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


57Item 14.

Principal Accountant Fees and Services


57PART IVItem 15.

Exhibits and Financial Statement Schedules


57EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   1




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##### Table of Contents



Forward-Looking
    Statements
   PART I  Item 1.
    Business  Overview
    Travelzoo Travelzoo Top 20 e-mail Newsflash e-mail SuperSearch pay-per-click Travelzoo Network
  Rent-A-Car.
       2




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Travelzoo
          Our
    Industry
   3




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The Internet Is Consumers Preferred Information
    Source.
  Benefits of Internet Advertising vs.  Print
    Advertising.
  New Advertising Opportunities.
  Suppliers Selling Directly.
  Problems
    Travel Companies Face and Limitations of Newspaper
    Advertising
        
    typically, ads must be submitted 2 to 5 days prior to the
    publication date, which makes it difficult to advertise
    last-minute inventory;
    once an ad is published, it cannot be updated or deleted when an
    offer is sold out;
    once an ad is published, the travel company cannot change a
    price;
    in many markets, the small number of newspapers and other print
    media reduces competition, resulting in high rates for newspaper
    advertising; and
    newspaper advertising does not allow for detailed performance
    tracking.  Our
    Products and Services
  Travelzoo Travelzoo Top 20 e-mail Newsflash e-mail SuperSearch, pay-per-click Travelzoo Network
 4




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##### Table of Contents



PublicationProduct

Content

Schedule

Reach/Usage*

Advertiser Benefits

Consumer BenefitsTravelzooWeb sites

Web sites in the U.S., Canada, China, France, Germany, Hong
    Kong, Japan, Taiwan, the U.K., among others, listing thousands
    of outstanding sales and specials from more than 900 travel
    companies

24/7

5.0 million unique visitors per month

Broad reach, sustained exposure, targeted placements by
    destination and travel segment

24/7 access to deals, ability to search and browse by
    destination  or keywordTravelzoo Top 20

Popular e-mail newsletter in the U.S., Canada, China, France,
    Germany, Hong Kong, Japan, Taiwan, and the U.K. listing 20 of
    the weeks most outstanding deals from selected travel
    companies

Weekly

12.0 million subscribers

Mass push advertising vehicle to quickly stimulate
    incremental travel

Weekly access to 20 outstanding, handpicked deals chosen from
    among thousandsNewsflash

Regionally-targeted e-mail alert service in the U.S., Canada,
    and the U.K. with a single time-sensitive and newsworthy travel
    offer

Within 2 hours of an offer being identified

9.8 million subscribers

Regional targeting, 100% share of voice for advertiser, flexible
    publication schedule

Breaking news offers delivered just-in- timeSuperSearch

Travel search engine in the U.S. and the U.K. using a
    proprietary algorithm to recommend sites and enable one-click
    searching

On-demand

5.0 million monthly searches

Drives qualified traffic directly to advertiser site on a
    pay-per-click basis

Saves time and money by recommending the sites most likely to
    have great rates for a specific itineraryTravelzoo Network

A network of third-party Web sites in the U.S. that list
    outstanding deals published by Travelzoo

24/7

Over 70 third-party Web sites

Reach users beyond the Travelzoo audience

Contextually relevant travel deals   *
    
    For TravelzooWeb sites, reach information is based on
    internal Travelzoo calculations using comScore Media Metrix and
    Alexa data. For Top 20, Newsflash, SuperSearch,and Travelzoo Network,reach/usage information is
    based on internal Travelzoo statistics as of December 31,
    2007.    Benefits
    to Travel Companies
    
    Real-Time Listings of Special Offers.  Our
    technology allows travel companies to advertise special offers
    on a real-time basis.
    Real-Time Updates.  Our technology allows
    travel companies to update their listings on a real-time basis.
    Real-Time Performance Reports.  We provide
    travel companies with real-time tracking of the performance of
    their advertising campaigns. Our solution enables travel
    companies to optimize their campaigns by removing or updating
    unsuccessful listings and further promote successful listings.
    Access to Millions of Consumers.  We provide
    travel companies fast access to millions of travel shoppers.
    Global Reach.  We offer access to Internet
    users across the U.S., Canada, China, France, Germany, Hong
    Kong, Japan, Taiwan, and the U.K. 5




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##### Table of Contents



Benefits
    to Consumers
  Travelzoo Travelzoo Top 20 Newsflash, SuperSearch Travelzoo Network
  
    Aggregation of Offers From Many Companies.  Our
    TravelzooWeb sites and our Travelzoo Top 20e-mail
    newsletter aggregate information on current special offers from
    more than 900 travel companies. This saves the consumer time
    when searching for travel sales and specials.
    Current Information.  Compared to newspaper
    ads, we provide consumers more current information, since our
    technology enables travel companies and us to update listings on
    a real-time basis.
    Search Tools.  We provide consumers with the
    ability to search for specific offers.  Growth
    Strategy
    
    Build Strong Brand Awareness.  We believe that
    it is essential to establish a strong brand with Internet users
    and within the travel industry. We currently utilize online
    marketing and direct marketing to promote our brand to
    consumers. In addition, we believe that we build brand awareness
    by product excellence that is promoted by word-of-mouth. We
    utilize sponsorships at industry conferences and public
    relations to promote our brand within the travel industry.
    Increase Reach.  In order to attract more users
    to our products, we intend to expand our advertising campaigns
    as our business grows. We believe that we also can attract more
    users by product excellence that is promoted by word-of-mouth.
    Quality User Base.  We believe that, in
    addition to increasing our reach, we need to maintain the
    quality of our user base. We believe that high quality content
    attracts a quality user base.
    Increase Number of Advertisers  We intend to
    continue to grow our advertising client base by expanding the
    size of our sales force. See  Sales and
    Marketing below.
    Excellent Service.  We believe that it is
    important to provide our advertising clients with excellent
    service.
    Replicate Business Model in Foreign
    Markets.  We believe that there is an opportunity
    to replicate our business model in selected foreign markets. We
    believe that there will be an additional market opportunity for
    us. In addition, we believe that we would strengthen our
    strategic position if we offered global advertising solutions to
    existing and new clients. 6




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Clients
    American Airlines

Interstate Hotels & ResortApple Vacations

JetBlue AirwaysATA

Kimpton HotelsAvis Rent A Car

Liberty TravelBritish Airways

LufthansaBudget Rent A Car

Marriott HotelsCaesars Entertainment

OrbitzCheapTickets

Pleasant HolidaysExpedia

Royal CaribbeanFairmont Hotels and Resorts

Spirit AirlinesFrontier Airlines

Starwood Hotels & Resorts WorldwideFunjet Vacations

United AirlinesHarrahs

Vanguard Rent-A-CarHawaiian Airlines

Virgin AtlanticHilton Hotels     Sales and
    Marketing
    e-mail
  Technology
  e-mails
     7




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Competition
  pay-per-click
      Government
    Regulation and Legal Uncertainties
    Privacy Concerns. e-mail
  Anti-Spam Legislation. e-mail
  Domain Names.
 8




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Jurisdictions.
  Intellectual
    Property
  Travelzoo Top 20. Travelzoo Top
    20 Travelzoo Top 20 Travelzoo Travelzoo Top 20 Travelzoo
    Employees
    Internet
    Access to Other Information
  Form 10-K, Form 10-Q Form 8-K Form 10-K.
  Item 1A.
    Risk
    Factors  Investing in our common stock involves a high degree of risk.
    Any or all of the risks listed below as well as other variables
    affecting our operating results could have a material adverse
    effect on our business, our quarterly and annual operating
    results or financial condition, which could cause the market
    price of our stock to decline or cause substantial volatility in
    our stock price, in which event the value of your common stock
    could decline. You should also keep these risk factors in mind
    when you read forward-looking statements.
  Risks
    Related to Our Financial Condition and Business Model
  We
    cannot assure you that we will sustain
    profitability.
   9




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Fluctuations
    in our operating results may negatively impact our stock
    price.
    
    mismatches between resource allocation and client demand due to
    difficulties in predicting client demand in a new market;
    changes in general economic conditions that could affect
    marketing efforts generally and online marketing efforts in
    particular;
    the magnitude and timing of marketing initiatives, including our
    acquisition of new subscribers and our expansion efforts in
    other regions;
    the introduction, development, timing, competitive pricing and
    market acceptance of our products and services and those of our
    competitors;
    our ability to attract and retain key personnel;
    our ability to manage our anticipated growth and expansion;
    our ability to attract traffic to our Web sites;
    technical difficulties or system downtime affecting the Internet
    generally or the operation of our products and services
    specifically;
    payments which we may make to previous stockholders of
    Travelzoo.com Corporation who failed to submit requests for
    shares in Travelzoo Inc. within the required time period; and
    volatility of our operating results in new markets.  Travelzoo
    We
    depend on two clients for a substantial part of our
    revenues.
    Our
    business model may not be adaptable to a changing
    market.
   10




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We may
    not be able to obtain sufficient funds to grow our business and
    any additional financing may be on terms adverse to your
    interests.
        Our
    business may be sensitive to recessions.
    Our
    operations could be significantly hindered by the occurrence of
    a natural disaster or other catastrophic event.
    Technological
    or other assaults on our service could harm our
    business.
    Risks
    Related to Our Markets and Strategy
  Our
    international expansion is expected to result in substantial
    operating losses, and is subject to other material
    risks.
   11




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
    trade barriers and changes in trade regulations;
    difficulties in developing, staffing and simultaneously managing
    foreign operations as a result of distance, language and
    cultural differences;
    stringent local labor laws and regulations;
    currency exchange rate fluctuations;
    risks related to government regulation; and
    potentially adverse tax consequences.  We may
    not be able to continue developing awareness of our brand
    name.
  Travelzoo
  Our
    business may be sensitive to events affecting the travel
    industry in general.
    We
    will not be able to attract travel companies or Internet users
    if we do not continually enhance and develop the content and
    features of our products and services.
    We may
    lose business if we fail to keep pace with rapidly changing
    technologies and clients needs.
    
    rapidly changing technology in online advertising;
    evolving industry standards, including both formal and de
    factostandards relating to online advertising;
    developments and changes relating to the Internet;
    competing products and services that offer increased
    functionality; and 12




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
    changes in travel company and Internet user requirements.    Our
    business and growth will suffer if we are unable to hire and
    retain highly skilled personnel.
    We may
    not be able to effectively manage our expanding
    operations.
    Intense
    competition may adversely affect our ability to achieve or
    maintain market share and operate profitably.
  pay-per-click Travelzoo
  Loss
    of any of our key management personnel could negatively impact
    our business.
   13




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We may
    not be able to access third party technology upon which we
    depend.
    Risks
    Related to the Market for our Shares
  Our
    stock price has been volatile historically and may continue to
    be volatile.
      We are
    controlled by a principal stockholder.
    Risks
    Related to Legal Uncertainty
  We may
    become subject to burdensome government regulations and legal
    uncertainties affecting the Internet which could adversely
    affect our business.
    
    user privacy;
    anti-spam legislation;
    consumer protection;
    copyright, trademark and patent infringement;
    pricing controls;
    characteristics and quality of products and services;
    sales and other taxes; and
    other claims based on the nature and content of Internet
    materials. 14




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We may
    be liable as a result of information retrieved from or
    transmitted over the Internet.
  e-mail e-mail e-mail e-mail
  Claims
    may be asserted against us relating to shares not issued in our
    2002 merger.
       15




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Our
    internal controls over financial reporting may not be effective,
    and our independent auditors may not be able to certify as to
    their effectiveness, which could have a significant and adverse
    effect on our business.
    We may
    be unable to protect our registered trademark or other
    proprietary intellectual property rights.
  Travelzoo
  Travelzoo Travelzoo
  We may
    face liability from intellectual property litigation that could
    be costly to prosecute or defend and distract managements
    attention with no assurance of success.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties   16




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Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    High


Low2007:Fourth Quarter

$
24.85


$
13.44Third Quarter

$
29.38


$
16.60Second Quarter

$
40.68


$
24.73First Quarter

$
39.20


$
28.672006:Fourth Quarter

$
40.10


$
28.23Third Quarter

$
37.87


$
26.17Second Quarter

$
52.99


$
18.41First Quarter

$
25.19


$
16.50       Dividend
    Policy
   17




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Sales of
    Unregistered Securities
    Repurchases
    of Equity Securities
      Performance
    Graph
    
 18




---



##### Table of Contents



Item 6.
    Selected
    Consolidated Financial Data    Consolidated
    Statement of Operations Data:
  Year Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Revenues

$
78,911


$
69,525


$
50,772


$
33,679


$
17,991Income from operations


20,624



29,753



14,870



11,033



3,739Net income


9,109



16,803



7,963



6,037



2,050Net income per share  basic

$
0.61


$
1.08


$
0.49


$
0.36


$
0.11Net income per share  diluted

$
0.57


$
1.01


$
0.45


$
0.33


$
0.10Shares used in per share calculation  basic


14,847



15,503



16,249



16,879



19,425Shares used in per share calculation  diluted


16,074



16,712



17,731



18,475



20,527   Consolidated
    Balance Sheet Data:
  December 31,2007


2006


2005


2004


2003(In thousands)Cash and cash equivalents

$
22,641


$
33,415


$
24,469


$
26,435


$
3,522Short term investments










19,887



10,032



Working capital


26,201



36,472



48,136



40,027



3,460Total assets


37,286



43,700



55,452



43,257



6,726Stockholders equity


25,901



36,817



48,533



40,263



3,841   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Overview
    Travelzoo Travelzoo Top 20 e-mail Newsflash e-mail SuperSearch, pay-per-click Travelzoo Network
 19




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Travelzoo Travelzoo
    Top 20 e-mail Newsflash e-mail SuperSearch, pay-per-click Travelzoo Network
      
    Growth of number of subscribers of the Companys
    newsletters and page views of the homepages of the TravelzooWeb sites;
    Operating margin;
    Growth in revenues in the absolute and relative to the growth in
    reach of the Companys publications; and
    Revenue per employee as a measure of productivity.  Critical
    Accounting Policies
    Revenue
    Recognition
      
    Evidence of an arrangement.  We consider an
    insertion order signed by the client or its agency to be
    evidence of an arrangement. 20




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
    Delivery.  Delivery is considered to occur when
    the advertising has been displayed and, if applicable, the
    click-throughs have been delivered.
    Fixed or determinable fee.  We consider the fee
    to be fixed or determinable if the fee is not subject to refund
    or adjustment and payment terms are standard.
    Collection is deemed reasonably assured.  We
    conduct a credit review for all transactions at the time of the
    arrangement to determine the creditworthiness of the client.
    Collection is deemed reasonably assured if we expect that the
    client will be able to pay amounts under the arrangement as
    payments become due. If we determine that collection is not
    reasonably assured, then we defer the revenue and recognize the
    revenue upon cash collection. Collection is deemed not
    reasonably assured when a client is perceived to be in financial
    distress, which may be evidenced by weak industry conditions, a
    bankruptcy filing, or previously billed amounts that are past
    due.    Allowance
    for Doubtful Accounts
    Liability
    to Former Stockholders
     21




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,2007


2006


2005Revenues


100.0
%


100.0
%


100.0
%Cost of revenues


2.7



1.5



1.7Gross profit


97.3



98.5



98.3Operating expenses:Sales and marketing


52.5



42.2



51.0General and administrative


18.7



13.5



18.0Total operating expenses


71.2



55.7



69.0Income from operations


26.1



42.8



29.3Other income and expenses, net


1.9



1.8



1.9Income before income taxes


28.0



44.6



31.2Income taxes


16.5



20.4



15.5Net income


11.5
%


24.2
%


15.7
%        22




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##### Table of Contents



Reach
  e-mail Travelzoo Travelzoo
  Year Ended December 31,


Year-Over-Year2007


2006


Growth(1)Subscribers:North AmericaTravelzoo Top 20


10,487,000



9,751,000



8
%Newsflash


8,404,000



7,545,000



11
%EuropeTravelzoo Top 20


1,346,000



625,000



115
%Newsflash


1,249,000



551,000



127
%Asia PacificTravelzoo Top 20


214,000







Newsflash


180,000







Page views of homepages of TravelzooWeb sites:North America


33,663,000



40,983,000



(18
)%Europe


8,593,000



3,447,000



149
%Asia Pacific


879,000







     (1)
    
    The comparability of year-over-year changes of page views of the
    homepages of TravelzooWeb sites may be limited due to
    the design and navigation of the Web sites. Additionally, we
    believe that the increased use of security software has
    adversely affected the tracking of page views.  Travelzoo Top 20 e-mail Travelzoo
  Travelzoo Top 20 e-mail Travelzoo
    Revenues
   23




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Travelzoo Travelzoo Top 20 Newsflash SuperSearch, Travelzoo Network
  Travelzoo Travelzoo Top 20 Newsflash SuperSearch
      
    our ability to increase our advertising rates;
    our ability to sell more advertising to existing clients;
    our ability to increase the number of clients;
    our ability to develop new revenue streams; and
    our ability to launch new products.     24




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##### Table of Contents



Cost
    of Revenues
  Travelzoo Network Travelzoo Network
  Operating
    Expenses
  Sales and
    Marketing
  e-mail
  e-mail SuperSearch Travelzoo.
    start-up
 25




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##### Table of Contents



General
    and Administrative
          Subscriber
    Acquisition
  Travelzoo Top 20 Newsflash e-mail
    
    Average Cost per Acquisition of a New
    Subscriber:  This is the quarterly costs of
    consumer marketing programs whose purpose was primarily to
    acquire new subscribers, divided by total new subscribers added
    during the quarter.
    New Subscribers:  Total new subscribers who
    signed up for at least one of our
    e-mail
    publications throughout the quarter. This is an unduplicated
    subscriber number, meaning a subscriber who signed up for two or
    more of our publications is only counted once.
    Subscribers Removed From List:  Subscribers who
    were removed from our lists throughout the quarter either as a
    result of their requesting removal, or based on periodic list
    maintenance after we determined that the
    e-mail
    address was likely no longer valid.
    Balance:  This is the number of subscribers at
    the end of the quarter, computed by taking the previous
    quarters subscriber balance, adding new subscribers during
    the current quarter, and subtracting subscribers removed from
    list during the current quarter. 26




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##### Table of Contents



Average Cost per





SubscribersAcquisition of a New





Removed FromPeriod

Subscriber


New Subscribers


List


BalanceQ1 2005

$
2.59



659,459



(475,938
)


8,329,258Q2 2005

$
2.62



806,734



(533,109
)


8,602,883Q3 2005

$
3.19



740,768



(422,868
)


8,920,783Q4 2005

$
2.41



729,460



(273,389
)


9,376,854Q1 2006

$
2.54



714,643



(317,947
)


9,773,550Q2 2006

$
2.11



737,735



(532,676
)


9,978,609Q3 2006

$
1.86



491,524



(327,471
)


10,142,662Q4 2006

$
1.56



373,559



(288,883
)


10,227,338Q1 2007

$
2.61



730,063



(345,896
)


10,611,505Q2 2007

$
3.03



552,488



(335,304
)


10,828,689Q3 2007

$
3.92



385,408



(255,008
)


10,959,089Q4 2007

$
3.78



279,967



(242,822
)


10,996,234     Average Cost per





SubscribersAcquisition of a New





Removed FromPeriod

Subscriber


New Subscribers


List


BalanceQ3 2005

$
1.65



127,857



(5,577
)


140,153Q4 2005

$
2.02



174,514



(16,898
)


297,769Q1 2006

$
2.15



143,666



(16,831
)


424,604Q2 2006

$
2.69



129,438



(34,070
)


519,972Q3 2006

$
1.23



126,566



(29,794
)


616,744Q4 2006

$
2.94



69,489



(30,943
)


655,290Q1 2007

$
3.89



159,439



(31,350
)


783,379Q2 2007

$
4.43



206,003



(39,690
)


949,692Q3 2007

$
2.96



331,903



(32,689
)


1,248,906Q4 2007

$
5.85



165,781



(33,357
)


1,381,330     Average Cost per





SubscribersAcquisition of a New





Removed FromPeriod

Subscriber


New Subscribers


List


BalanceQ2 2007

$
2.46



1,068



(4
)


1,064Q3 2007

$
2.23



42,106



(138
)


43,032Q4 2007

$
2.90



180,446



(9,013
)


214,465        27




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##### Table of Contents



Segment
    Information
  Form 10-K
  North
    America
  Year Ended December 31,2007


2006


2005(In thousands)Net revenues

$
73,232


$
66,509


$
50,161Income from operations


28,959



31,337



16,000Income from operations as a % of revenues


40
%


47
%


32
%       e-mail
   28




---



##### Table of Contents



Europe
  Year Ended December 31,2007


2006


2005(In thousands)Net revenues

$
5,856


$
3,232


$
757Loss from operations


(5,172
)


(1,586
)


(1,117
)Loss from operations as a % of revenues


88
%


49
%


148
%     e-mail
  e-mail
  Asia
    Pacific
  Year Ended December 31,2007


2006


2005(In thousands)Net revenues

$
8


$



$
Loss from operations


(3,166
)






   e-mail
  Interest
    Income
   29




---



##### Table of Contents



Income
    Taxes
        Liquidity
    and Capital Resources
         30




---



##### Table of Contents



Travelzoo
        2008


2009


2010


2011


2012


Thereafter


TotalOperating leases

$
2,884


$
1,791


$
159


$
155


$
159


$
13


$
5,161Purchase obligations


1,054























1,054Total commitments

$
3,938


$
1,791


$
159


$
155


$
159


$
13


$
6,215         Growth
    Strategy
    
    Replicate our business model in selected foreign markets in Asia
    Pacific and Europe; and
    Expand the scope of our business model. 31




---



##### Table of Contents



Travelzoo Network
      Recent
    Accounting Pronouncements
  No. 157-2 No. 157-2), No. 157-2 No. 157-2.
    SFAS No. 141-R, (SFAS No. 141-R), SFAS No. 141-R
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk     32




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  TRAVELZOO
    INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


34Consolidated Balance Sheets


35Consolidated Statements of Operations


36Consolidated Statements of Stockholders
    Equity and Comprehensive Income


37Consolidated Statements of Cash Flows


38Notes to Consolidated Financial Statements


39   33




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control  Integrated
    Framework
        Internal Control  Integrated Framework
  KPMG
    LLP
    34




---



##### Table of Contents



TRAVELZOO
    INC.
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands, except per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
22,641


$
33,415Accounts receivable, less allowance for doubtful accounts of
    $290 and $726 at 2007 and 2006, respectively


9,969



7,274Deposits


272



177Prepaid expenses and other current assets


1,982



506Deferred tax assets


1,393



1,980Total current assets


36,257



43,352Deposits, less current portion


349



142Property and equipment, net


622



172Intangible assets, net


58



34Total assets

$
37,286


$
43,700LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
4,960


$
2,839Accrued expenses


4,608



2,149Deferred revenue


450



750Deferred rent


37



Income tax payable






1,142Total current liabilities


10,055



6,880Long-term tax liabilities


1,256



Other non-current liabilities


73



3Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value per share
    (5,000 shares authorized; none issued)






Common stock, $0.01 par value per share (40,000 shares
    authorized; 14,250 and 15,250 shares issued and outstanding
    at 2007 and 2006, respectively)


143



153Additional paid-in capital






2,076Retained earnings


25,939



34,566Accumulated other comprehensive income (loss)


(180
)


22Total stockholders equity


25,902



36,817Total liabilities and stockholders equity

$
37,286


$
43,700    35




---



##### Table of Contents



TRAVELZOO
    INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2007


2006


2005(In thousands, except per share amounts)Revenues

$
78,911


$
69,525


$
50,772Cost of revenues


2,097



1,038



878Gross profit


76,814



68,487



49,894Operating expenses:Sales and marketing


41,440



29,378



25,915General and administrative


14,750



9,356



9,109Total operating expenses


56,190



38,734



35,024Income from operations


20,624



29,753



14,870Interest income


1,309



1,249



961Gain (loss) on foreign currency


178



3



(15
)Income before income tax expense


22,111



31,005



15,816Income tax expense


13,002



14,202



7,853Net income

$
9,109


$
16,803


$
7,963Net income per share:Basic net income per share

$
0.61


$
1.08


$
0.49Diluted net income per share

$
0.57


$
1.01


$
0.45Shares used in computing basic net income per share


14,847



15,503



16,249Shares used in computing diluted net income per share


16,074



16,712



17,731    36




---



##### Table of Contents



TRAVELZOO
    INC.
  CONSOLIDATED
    STATEMENTS OF
 STOCKHOLDERS
    EQUITY AND COMPREHENSIVE INCOME
  AccumulatedAdditional





Other


TotalCommon Stock


Treasury


Paid-In


Retained


Comprehensive


StockholdersShares


Amount


Stock


Capital


Earnings


Income (Loss)


Equity(In thousands)Balances, December 31, 2004


16,233



162







30,300



9,800







40,262Proceeds from exercises of options


17



1







34











35Tax benefit of non- qualified stock options exercise














435











435Additional issuance costs related to Q4 2005














(124
)










(124
)Comprehensive income:Foreign currency translation adjustment






















(38
)


(38
)Net income


















7,963







7,963Total comprehensive income


























7,925Balances, December 31, 2005


16,250



163







30,645



17,763



(38
)


48,533Repurchase of common stock


(1,000
)






(28,579
)














(28,579
)Retirement of common stock






(10
)


28,579



(28,569
)










Comprehensive income:Foreign currency translation adjustment






















60



60Net income


















16,803







16,803Total comprehensive income


























16,863Balances, December 31, 2006


15,250



153







2,076



34,566



22



36,817Repurchase of common stock


(1,000
)






(19,822
)














(19,822
)Retirement of common stock






(10
)


19,822



(2,076
)


(17,736
)






Comprehensive income:Foreign currency translation adjustment






















(202
)


(202
)Net income


















9,109







9,109Total comprehensive income


























8,907Balances, December 31, 2007


14,250


$
143


$



$



$
25,939


$
(180
)

$
25,902    37




---



##### Table of Contents



TRAVELZOO
    INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activities:Net income

$
9,109


$
16,803


$
7,963Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


193



131



167Deferred income taxes


584



(929
)


(676
)Provision for losses on accounts receivable


(48
)


304



317Tax benefit of stock option exercises










435Accrued income for short-term investments






(449
)


(49
)Changes in operating assets and liabilities:Accounts receivable


(2,614
)


1,511



(4,019
)Deposits


(300
)


(95
)


(55
)Prepaid expenses and other current assets


(1,465
)


136



40Accounts payable


2,110



440



1,940Accrued expenses


2,404



(1,278
)


938Deferred revenue


(302
)


449



205Deferred rent


109







Income tax payable


3



285



919Other non-current liabilities


111







Net cash provided by operating activities


9,894



17,308



8,125Cash flows from investing activities:Purchases of property and equipment


(627
)


(119
)


(156
)Purchase of short-term investments






(14,663
)


(49,500
)Sale of short-term investments






35,000



39,693Purchases of intangible assets


(36
)


(34
)


Net cash provided by (used in) investing activities


(663
)


20,184



(9,963
)Cash flows from financing activities:Proceeds from issuance of common stock, net of related costs










(124
)Proceeds from stock option exercises










35Repurchase of common stock


(19,822
)


(28,579
)


Net cash used in financing activities


(19,822
)


(28,579
)


(89
)Effect of exchange rate changes on cash and cash equivalents


(183
)


33



(39
)Net increase (decrease) in cash and cash equivalents


(10,774
)


8,946



(1,966
)Cash and cash equivalents at beginning of year


33,415



24,469



26,435Cash and cash equivalents at end of year

$
22,641


$
33,415


$
24,469Supplemental disclosure of cash flow information:Cash paid for income taxes, net of refunds received

$
13,334


$
14,845


$
7,176    38




---



##### Table of Contents



TRAVELZOO
    INC.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007, 2006, and 2005 (1)
    Summary
    of Significant Accounting Policies  (a)
    The
    Company and Basis of Presentation  Travelzoo Travelzoo Top 20 e-mail Newsflash e-mail SuperSearch pay-per-click Travelzoo Network
      Travelzoo pooling-of-interests
   39




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        pooling-of-interests
 40




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (b)
    Revenue
    Recognition  Travelzoo Travelzoo
    Top 20 e-mail Newsflash SuperSearch Travelzoo Network.
      
    Evidence of an arrangement.  The Company
    considers an insertion order signed by the client or its agency
    to be evidence of an arrangement.
    Delivery.  Delivery is considered to occur when
    the advertising has been displayed and, if applicable, the
    click-throughs have been delivered.
    Fixed or determinable fee.  The Company
    considers the fee to be fixed or determinable if the fee is not
    subject to refund or adjustment and payment terms are standard.
    Collection is deemed reasonably assured.  The
    Company conducts a credit review for all transactions at the
    time of the arrangement to determine the creditworthiness of the
    client. Collection is deemed reasonably assured if it is
    expected that the client will be able to pay amounts under the
    arrangement as payments become due. If it is determined that
    collection is not reasonably assured, then revenue is deferred
    and recognized upon cash collection. Collection is deemed not
    reasonably assured when a client is perceived to be in financial
    distress, which may be evidenced by weak industry condition,
    bankruptcy filing, or previously billed amounts that are past
    due.  Travelzoo Top 20 Newsflash
   41




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (c)
    Net
    Income Per Share      Year Ended December 31,2007


2006


2005Basic net income per share:Net income

$
9,109


$
16,803


$
7,963Weighted average common shares


14,847



15,503



16,249Basic net income per share

$
0.61


$
1.08


$
0.49Diluted net income per share:Net income

$
9,109


$
16,803


$
7,963Weighted average common shares


14,847



15,503



16,249Effect of dilutive securities  stock options


1,227



1,209



1,482Weighted average common and potential common shares


16,074



16,712



17,731Diluted net income per share

$
0.57


$
1.01


$
0.45   (d)
    Use of
    Estimates    (e)
    Property
    and Equipment    December 31,2007


2006Computer hardware and software

$
439


$
372Office equipment


913



442Leasehold improvements


69



1,421



814Less accumulated depreciation


799



642Total

$
622


$
172    42




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (f)
    Intangible
    Assets    December 31,2007


2006Acquired amortized intangible assets:Internet domain names

$
418


$
382Less accumulated amortization


360



348Total

$
58


$
34         Year ended December 31,2008

$
132009


132010


132011


132012


6$
58   (g)
    Cash
    and Cash Equivalents    (h)
    Advertising
    Costs    (i)
    Income
    Taxes   43




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (j)
    Comprehensive
    Income    (k)
    Impairment
    of Long-Lived Assets    (l)
    Stock-Based
    Compensation      (m)
    Web
    Site Development Costs  No. 00-02,
  (n)
    Foreign
    Currency   44




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (o)
    Recent
    Accounting Pronouncements  No. 157-2 No. 157-2), No. 157-2 No. 157-2.
    SFAS No. 141-R, (SFAS No. 141-R), SFAS No. 141-R
  (2)
    Commitments
    and Contingencies    2008


2009


2010


2011


2012


Thereafter


TotalMinimum rental payments

$
2,884


$
1,791


$
159


$
155


$
159


$
13


$
5,161    45




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     46




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (3)
    Other
    Balance Sheet Items    Balance at December 31, 2004

$
127Additions  charged to cost and expenses, net


317Deductions  write-offs


(26
)Balance at December 31, 2005


418Additions  charged to costs and expenses, net


308Balance at December 31, 2006


726Additions  charged to costs and expenses, net


(48
)Deductions  write-offs


(388
)Balance at December 31, 2007

$
290     December 31,2007


2006Prepaid expenses

$
978


$
502Income tax receivable


999



Other current assets


5



4Total prepaid expenses and other current assets

$
1,982


$
506     December 31,2007


2006Accrued advertising expense

$
2,011


$
1,257Accrued compensation expense


1,159



456Accrued professional services expense


541



215Other accrued expenses


897



221Total accrued expenses

$
4,608


$
2,149   (4)
    Income
    Taxes    2007


2006


2005U.S.

$
30,891


$
33,196


$
16,950Foreign


(8,780
)


(2,191
)


(1,134
)$
22,111


$
31,005


$
15,816  47




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Current


Deferred


Total(In thousands)2007:Federal

$
9,395


$
483


$
9,878State


3,023



101



3,124$
12,418


$
584


$
13,0022006:Federal

$
11,372


$
(866
)

$
10,506State


3,759



(63
)


3,696$
15,131


$
(929
)

$
14,2022005:Federal

$
6,536


$
(595
)

$
5,941State


1,993



(81
)


1,912$
8,529


$
(676
)

$
7,853       2007


2006


2005Federal tax at statutory rates

$
7,739


$
10,852


$
5,536State taxes, net of federal income tax benefit


2,028



2,402



1,243Foreign losses not benefited


3,073



767



397Non-deductible expenses and other


162



181



677Total income tax expense

$
13,002


$
14,202


$
7,853    48




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006Deferred tax assets:Foreign net operating loss carryforwards

$
3,154



State income taxes


1,031



1,253Accruals and allowances


335



665Intangible assets


89



98Total deferred tax assets


4,609



2,016Valuation allowance


(3,154
)


Net deferred tax assets

$
1,455


$
2,016Deferred tax liabilities:Property and equipment

$
(62
)

$
(39
)Total deferred tax liabilities


(62
)


(39
)Net deferred tax assets

$
1,393


$
1,977      49




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Unrecognized tax benefits balance at January 1, 2007

$
1,107Increase related to prior year tax positions


38Decrease related to prior year tax positions


Increase related to current year tax positions


Settlements


Lapse of statute of limitations


Unrecognized tax benefits balance at December 31, 2007

$
1,145       (5)
    Stockholders
    Equity       50




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (6)
    Stock-based
    Compensation and Stock Options              Weighted-Average


AggregateWeighted-Average


Remaining


IntrinsicShares


Exercise Price


Contractual Life


Value(In thousands)Outstanding at December 31, 2006


2,211,074


$
1.03Outstanding at December 31, 2007


2,211,074


$
1.03



3.11 years


$
27,974Exercisable and fully vested at December 31, 2007


2,211,074


$
1.03



3.11 years


$
27,974  51




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  in-the-money
  Shares


Weighted-AverageOutstanding and


Remaining


Weighted-AverageExercise Price

Exercisable


Contractual Life


Exercise Price$1.00


2,158,349



3.09 years


$
1.00$2.00


42,725



3.83 years



2.00$3.00


10,000



4.25 years



3.002,211,074



3.11 years


$
1.03   (7)
    Segment
    Reporting and Significant Customer Information        Year Ended December 31, 2007:

North America


Europe


Asia Pacific


Elimination


ConsolidatedRevenues from unaffiliated customers

$
73,061


$
5,842


$
8


$



$
78,911Intersegment revenues


171



14







(185
)


Total net revenues


73,232



5,856



8



(185
)


78,911Operating income (loss)


28,959



(5,172
)


(3,166
)


3



20,624   Year Ended December 31, 2006:

North America


Europe


Asia Pacific


Elimination


ConsolidatedRevenues from unaffiliated customers

$
66,303


$
3,222


$



$



$
69,525Intersegment revenues


206



10







(216
)


Total net revenues


66,509



3,232







(216
)


69,525Operating income (loss)


31,337



(1,586
)






2



29,753   As of December 31, 2007

North America


Europe


Asia Pacific


Elimination


ConsolidatedProperty and equipment, net:

$
383


$
70


$
169


$



$
622Total assets


45,801



3,525



2,094



(14,134
)


37,286   52




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  As of December 31, 2006

North America


Europe


Asia Pacific


Elimination


ConsolidatedProperty and equipment, net:

$
126


$
46


$



$



$
172Total assets


45,922



3,093







(5,315
)


43,700       Percent of


Percent ofRevenues


Account ReceivableYear Ended December 31,


December 31,


December 31,Customer

2007


2006


2005


2007


2006Travelport Limited


15
%


16
%


12
%


14
%


16
%Expedia, Inc.


11
%


14
%



*


18
%


16
%Sabre Holdings Corporation



*



*


15
%



*



*     *
    
    Less than 10%    (8)
    401(k)
    Plan    (9)
    Related
    Party Transaction     53




---



##### Table of Contents



TRAVELZOO
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (10)
    Unaudited
    Quarterly Information    Quarters EndedDec 31,


Sept 30,


June 30,


Mar 31,


Dec 31,


Sept 30,


June 30,


Mar 31,2007


2007


2007


2007


2006


2006


2006


2006(In thousands, except per share amounts)Revenues

$
19,113


$
19,943


$
20,115


$
19,740


$
17,652


$
17,586


$
17,358


$
16,929Cost of revenues


737



563



444



353



256



232



286



264Gross profit


18,376



19,380



19,671



19,387



17,396



17,354



17,072



16,665Operating expenses:Sales and marketing


10,425



10,953



10,745



9,317



7,331



6,975



7,973



7,099General and administrative


5,496



3,488



3,173



2,593



2,394



2,249



2,112



2,601Total operating expenses


15,921



14,441



13,918



11,910



9,725



9,224



10,085



9,700Income from operations


2,455



4,939



5,753



7,477



7,671



8,130



6,987



6,965Interest income


205



312



428



364



323



280



302



344Gain (loss) on foreign currency


76



67



36



(1
)


(10
)


7



13



(7
)Income before income tax expense


2,736



5,318



6,217



7,840



7,984



8,417



7,302



7,302Income tax expense


2,690



3,164



3,371



3,777



3,699



3,866



3,452



3,185Net income

$
46


$
2,154


$
2,846


$
4,063


$
4,285


$
4,551


$
3,850


$
4,117Basic net income per share

$
.00


$
.15


$
.19


$
.27


$
.28


$
.30


$
.25


$
.26Diluted net income per share

$
.00


$
.14


$
.17


$
.25


$
.26


$
.28


$
.23


$
.24  54




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Rule 13a-15(e).
  Rule 13a-15(f))
  Managements
    Report on Internal Control Over Financial Reporting
      Internal Control  Integrated Framework. Form 10-K.
  
   Chairman of the Board and Chief Executive Officer
  
   Chief Financial Officer
   55




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##### Table of Contents



Item 9B.
    Other
    Information   PART III Item 10.
    Directors,
    Executive Officers and Corporate Governance of the
    Registrant      Name

Age

PositionRalph Bartel, Ph.D.


42


President and Chief Executive OfficerC.J. Kettler


51


President, North AmericaWayne Lee


36


Chief Financial OfficerChristopher Loughlin


34


Executive Vice President, EuropeRaymond Ng


46


Executive Vice President, AsiaMax Rayner


47


Chief Information OfficerJason Yap


38


Executive Vice President, Japan, India and Australia   Ralph Bartel, Ph.D.,
  C.J. Kettler
  Wayne Lee, CPA
  Christopher Loughlin
  Raymond Ng
  Max Rayner
 56




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##### Table of Contents



Jason Yap
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    Our Consolidated Financial Statements are included
    in Part II, Item 8:
              Supplementary Consolidated Financial Statement
    Schedules:
    Exhibits:
   57




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##### Table of Contents



SIGNATURES
      By:
    /s/  WAYNE
    LEE   Chief Financial Officer
    POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title(s)

Date/s/  RALPH
    BARTELRalph
    Bartel

Chairman of the Board and Chief
    Executive Officer

March 17, 2008/s/  WAYNE
    LEEWayne
    Lee

Chief Financial Officer

March 17, 2008/s/  HOLGER
    BARTELHolger
    Bartel

Director

March 17, 2008/s/  DAVID
    J. EHRLICHDavid
    J. Ehrlich

Director

March 17, 2008/s/  DONOVAN
    NEALE-MAYDonovan
    Neale-May

Director

March 17, 2008/s/  KELLY
    M. URSOKelly
    M. Urso

Director

March 17, 2008  58




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber



Description3
.1



Certificate of Incorporation of Travelzoo Inc. (Incorporated by
    reference to our Pre-Effective Amendment No. 6 to our
    Registration Statement on
    Form S-4
    (File
    No. 333-55026),
    filed February 14, 2002)3
.2



By-laws of Travelzoo Inc. (Incorporated by reference to our
    Pre-Effective Amendment No. 6 to our Registration Statement
    on
    Form S-4
    (File
    No. 333-55026),
    filed February 14, 2002)10
.1*



Employment Agreement, dated as of April 1, 2000, between
    Silicon Channels Corporation and Ralph Bartel (Incorporated by
    reference to Exhibit 10.1 to our Registration Statement on
    Form S-4
    (File No. 333-55026),
    filed February 6, 2001)10
.2*



Stock Option Agreement dated January 22, 2001, between
    Ralph Bartel and Travelzoo Inc. (Incorporated by reference to
    Exhibit 10.2 to our Registration Statement on
    Form S-4
    (File No. 333-55026),
    filed February 6, 2001)10
.3



Form of Director and Officer Indemnification Agreement
    (Incorporated by reference to Exhibit 10.1 on
    Form 10-Q
    (File
    No. 000-50171),
    filed November 9, 2007)10
.4*



Christopher Loughlin Service Agreement, dated as of May 16,
    2005, between Travelzoo UK Ltd and Christopher Loughlin
    (Incorporated by reference to Exhibit 10.1 on
    Form 10-Q
    (File
    No. 000-50171),
    filed August 15, 2005)10
.5*



Christopher Loughlin Amended Service Agreement, effective as of
    July 1, 2006, between Travelzoo (Europe) Limited and
    Christopher Loughlin. (Incorporated by reference to
    Exhibit 10.2 on
    Form 10-Q
    (File
    No. 000-50171),
    filed August 9, 2006)10
.6*



Wai Ming (Raymond) Ng Service Agreement, dated February 5,
    2007, between Travelzoo Inc. and Wai Ming Ng. (Incorporated by
    reference to Exhibit 10.7 on
    Form 10-K
    (File
    No. 000-50171),
    filed March 15, 2007)10
.7*



Travelzoo Inc. North America Executive Bonus Plan as Amended and
    Restated Effective January 1, 2007. (Incorporated by
    reference to Exhibit 10.1 on
    Form 8-K
    (File
    No. 000-50171),
    filed April 11, 2007)10
.8*



Employment Agreement, dated as of December 9, 2005, between
    Wayne Lee and Travelzoo Inc. (Incorporated by reference to
    Exhibit 10.3 on
    Form 10-Q
    (File
    No. 000-50171),
    filed May 10, 2007)10
.9*



Amendment to Service Agreement between Travelzoo (Europe)
    Limited and Christopher Loughlin dated as of August 13,
    2007. (Incorporated by reference to Exhibit 10.1 on
    Form 8-K
    (File No. 000-50171),
    filed August 15, 2007)10
.10*



Employment Agreement, effective as of November 5, 2007, by
    and between Travelzoo Inc. and Max Rayner. (Incorporated by
    reference to Exhibit 10.1 on
    Form 8-K
    (File
    No. 000-50171),
    filed October 24, 2007)10
.11*



Employment Agreement, effective as of November 12, 2007, by
    and between Travelzoo Inc. and C.J. Kettler. (Incorporated
    by reference to Exhibit 10.1 on
    Form 8-K
    (File
    No. 000-50171),
    filed November 13, 2007)10
.12



Agreement of Lease, effective as of February 1, 2008,
    between Travelzoo Inc. and 590 Madison Avenue, LLC.
    (Incorporated by reference to Exhibit 10.1 on
    Form 8-K
    (File
    No. 000-50171),
    filed February 7, 2008)21
.1



Subsidiaries of Travelzoo Inc.23
.1



Consent of Independent Registered Public Accounting Firm24
.1



Power of Attorney (included on signature page)31
.1



Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2



Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200232
.1



Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 200232
.2



Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002     *
    
    This exhibit is a management contract or a compensatory plan or
    arrangement.
    
    Filed herewith.
    
    Furnished herewith. 59