--Expedia to take majority control of Europe-focused
metasearch
--Move comes after Priceline agreed to buy metasearch leader
Kayak
--Expedia's previous moves were in opposite direction
(Adds details throughout.)
By Joan E. Solsman and Ben Fox Rubin
Expedia Inc. (EXPE) made a U-turn Friday, agreeing to buy a
majority stake in Europe-focused travel metasearch engine Trivago a
year after spinning off another ad-based business, TripAdvisor Inc.
(TRIP).
The online travel agency agreed to acquire 61.6% of Trivago for
about EUR477 million, or roughly $632 million--including EUR434
million in cash and EUR43 million in Expedia stock. Expected to
close in the first half of next year, the deal should benefit
Expedia's 2013 earnings, it said.
It comes six weeks after Priceline.com Inc. (PCLN) agreed to
purchase the leading travel metasearch company Kayak Software Corp.
(KYAK) for $1.8 billion. It also comes a month after Expedia
management indicated it wasn't interested in making any big moves
in the metasearch space.
Trivago is smaller than Kayak. Expedia said it is expected to
deliver EUR100 million in revenue this year, or about $133 million,
whereas analysts expect Kayak to book $296 million. But Trivago
leads in metasearch in Europe, a region that is the industry's
centerpoint for growth and where Kayak has less traction than in
the U.S.
Last month, following Priceline's pact to buy Kayak, Expedia
Chief Executive Dara Khosrowshahi indicated his company wasn't
interested in metasearch acquisitions.
The metasearch proposition is a solid one from a consumer
standpoint, and the company always keeps its eye on good brands, he
said. But "right now, we're focused on our base business versus
looking to make any big moves," Mr. Khosrowshahi said.
Expedia is in the final stages of redeveloping its technology
after four years of investment that often weighed down profit.
In October, the company reported better-than-expected results
driven by improvement in its technology-enhanced hotel
business.
Expedia shares were down 2.5% at $59.41 amid a broad market
decline. The stock has more than doubled since the start of the
year.
Write to Joan E. Solsman at joan.solsman@dowjones.com and Ben
Fox Rubin at ben.rubin@dowjones.com
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