Does Expedia Need Amazon?


Online retail giant Amazon.com is making some waves in the travel sector,
filing suit against Expedia for alleged non-payment of about $3.7 million in
connection with the travel site’s placement on Amazon.


Bellevue, Wash.-based Expedia was mum on the lawsuit, in
which Seattle-based Amazon claimed Expedia refused to pay
up unless the contract was renegotiated.


Amazon launched
a travel store
in conjunction with Expedia last Sept. 26. Hotwire and
National Leisure Group’s The Vacation Store were also part of the deal.
However, the Expedia deal was signed in May of 2001, when Expedia was less of
a Web presence.


The idea was a one-stop travel shop for Amazon customers. As usual, the
financial terms were not disclosed at the time, but apparently they involved
fixed payments as opposed to revenue sharing.


Expedia’s Web travel business has since soared, and the travel site may feel
it no longer needs exposure on Amazon.


In a complaint filed with the Superior Court of King County, Washington,
where Expedia and Amazon both have their headquarters, Amazon said that
Expedia breached the contract by “refusing to pay the amounts owed to
Amazon.com unless Amazon.com renegotiated” its agreement to offer Expedia’s
services, Reuters reported.


The suit says Expedia had agreed to pay Amazon $16 million in 12 quarterly
installments for featuring Expedia’s travel services


After paying an initial $3.33 million, Expedia allegedly failed to pay $3.66
million due since February of this year, Amazon said. Amazon is suing for
that amount plus interest, attorney fees and expenses.


As of this morning, Expedia was still listed as a featured partner in the Amazon travel store.


Amazon’s other travel partners apparently are up to snuff on their
agreements.


Amazon said that it has extended its deals with the other original partners
in the travel store — discount travel operation Hotwire and National Leisure Group’s The Vacation Store. Financial
terms of these deals were not disclosed.

News Around the Web