Expedia Snags Travelscape.com, VacationSpot.com

The online travel space became a little smaller as Expedia Inc. purchased competitors Travelscape.com Inc. and VacationSpot.com Inc. for
approximately $177 million in stock.

The deal was announced late Monday after U.S. markets had closed.

Expedia (EXPE), a division of Microsoft Corp. (MSFT), will issue approximately 2.6 million shares and options, valued at
approximately $82 million, in exchange for all of the outstanding shares,
options and warrants of VacationSpot.com. The company will issue
approximately 3 million shares, options and warrants, valued at
approximately $95 million, in exchange for all outstanding shares, options
and warrants of Travelscape.com.

Both Travelscape.com and VacationSpot.com focus on providing lodging
information and reservations. Travelscape.com operates both Travelscape.com
and LVRS.com (Las Vegas Reservations
Systems), contracting with hotel properties for inventory at wholesale
prices at more than 1,200 hotels in 240 cities. VacationSpot.com is a
reservation network for vacation homes, rental condos, inns and
bed & breakfasts, operating the VacationSpot.com and Rent-a-Holiday.comWeb sites.

With the acquisitions, Expedia has access to 65,000 lodging properties
worldwide, said Richard Barton, president and chief executive officer of Expedia Inc.

“The combination of the broad and unique selection of getaways from
VacationSpot.com, discounted hotel rates from Travelscape.com, and the
Expedia hotel directory creates the largest and most compelling lodging
offering on the Internet,” he said. “. . .We’re really excited by the
progress these acquisitions make towards
achieving our goal of providing the
widest possible selection of worldwide lodging options to our customers.”

In addition to hotel pricing, Expedia offers flight and car booking,
vacation package and cruise offers, destination information, and
point-to-point mapping. The company ran into some legal trouble in October
when name-your-price hotel service priceline.com Inc. (PCLN)
filed suit, alleging Expedia’s hotel pricing system too closely resembles
its system and accused Microsoft of stealing priceline’s commerce system
technology and related elements.

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