Ann Arbor-based mobile software developer Mobiata plans to quadruple its office space on the second floor of the popular Nickels Arcade shopping corridor in downtown Ann Arbor.

The expansion serves as another indication that Bellevue, Wash.-based travel website Expedia Inc., which acquired Mobiata in December, plans to maintain Mobiata’s local presence.

The new office space — the company will move this summer from a cramped 400-square-foot office to about 1,600 square feet down the hall in a deal with Arch Realty — will fuel Mobiata’s continued growth. Founder and CEO Ben Kazez said he expects Mobiata to grow from 17 employees today to more than 30 by the end of the year.

Some of those workers are stationed elsewhere, including a marketing team in Silicon Valley and others in Minnesota, Austin, Texas and Boston. But Kazez said Ann Arbor would serve as the base for the company’s growth. He said he's currently looking to hire about three full-time designers and 10 software engineers.

“We’re not moving out to Bellevue. We’re very clear about that,” Kazez said. “We’re sort of being kept at arm’s length as the mobile arm of Expedia.”

Mobiata’s first big moment as an Expedia property came when the company introduced the Expedia Hotels application for Apple devices in April. The app gives iPhone and iPod Touch users an easy way to scroll through hotels and book stays.

On May 11, the company traveled to a Google developers conference to show off the version of Expedia Hotels created for phones that use Google’s Android system.

Kazez said the next step is to integrate trip planning and flight booking capabilities into the app.

“It’s been doing really well, but it’s just 1.0,” Kazez said, using software vernacular for the first version of a program. “We’re iterating really fast.”

Expedia is counting on Mobiata to develop technology that will make the booking experience more pleasant and, thus, boost the slice of bookings completed through the company’s mobile websites and applications.

“Mobile bookings are growing very fast across our brands, and extremely short booking window on these transactions, a very high percentage of which are same-day bookings, suggests to us that they're likely incremental,” Expedia CEO Dara Khosrowshahi told investors in a February earnings call, according to a transcript posted on SeekingAlpha.com.

Khosrowshahi, describing what he called "wild guesses," told investors that if mobile visitors currently account for about 4 percent to 5 percent of Expedia's traffic, it would be very reasonable to boost that figure to more than 10 percent within 12 to 18 months.

Kazez said mobile applications represent a significant opportunity for the travel industry.

“It’s not cannibalizing desktop sales,” he said. “It’s just a tremendously big business opportunity. From a product perspective, it’s a chance to rethink how every aspect of Expedia works totally from scratch and a way to throw out everything that has been on the desktop and try to come out with what makes the most sense on mobile.”

Staying nimble and adaptable is critical to the company’s success, he said.

Among the key opportunities for the company is the development of applications for tablet devices, including Apple’s iPad. Mobiata sells several applications for the iPad, including a version of its popular FlightTrack application, which helps frequent travelers keep tabs on their flight iterinaries.

Kazez said Mobiata would continue to develop its own applications, but he declined to offer details.

Mobiata is "a small team that thinks mobile but thinks differently, and already the kind of work that they're doing with the Expedia team is incredibly encouraging as far as radically improving the quality of our mobile product," Khosrowshahi said in February. "So within in 2011, we expect to see those benefits."

Kazez said Ann Arbor is a good place to base his company.

“I want as much of it as possible to happen here,” Kazez said. “I love the city. I love having as many (people) as possible here.”

He said he’s intentionally taking a methodical approach to hiring new talent and that a slow hiring pace should not be viewed as a function of a lack of talent in the Ann Arbor area. He said he wants to find developers and designers who have an appreciation and understanding of what drive’s good software engineering and a pleasant visual experience.

“Regardless of where you are, I think it’s a challenge to find the right people because you want to make sure it’s a culture fit,” he said.

Having the financial power of Expedia (NasdaqGS: EXPE), which reported annual revenues of $3.45 billion last year, will help with recruiting, he said.

“One of the things that’s been great is that we can now afford to help people with relocation,” he said. “You’ll start to see us bringing people here, whereas before you’d see us saying, ‘Please, please, come here.’”

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.