USA Networks to take over Expedia, will launch travel channel
Tuesday, July 17th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ USA Networks Inc. is acquiring a controlling interest in online travel site Expedia Inc. and launching a cable channel devoted to travel, giving media mogul Barry Diller a major foothold in the travel business.
As part of the deal announced Monday, Diller, chairman and chief executive of USA Networks, will also acquire National Leisure Group Inc., an online travel company.
Diller will fold Expedia, NLG, the new channel and his stake in the Hotel Reservations Network, an online booking service, into one business unit.
The new travel channel is expected to complete with Discovery's The Travel Channel.
Expedia was launched by software giant Microsoft Corp. in 1996. Microsoft has already committed to selling its stake to concentrate on its core business.
USA Networks expects its travel group to generate about $4 billion a year in travel bookings. The company hopes to launch the USA Travel Channel this year.
Diller has previously melded online commerce, cable TV and traditional media, notably with the Home Shopping Network and its companion Web site.
He also has interests in Ticketmaster, Citysearch, dating service Match.com and City Auction. His entertainment properties include the USA cable channel, the Sci-Fi Channel and a film and television studio.
USA Networks is paying Microsoft a combination of stock and warrants which analysts valued at about $40 a share, making Microsoft's stake worth $1.2 billion.
USA Networks is to buy up to 37.5 million shares with the offer, giving it a stake of about 75 percent in Expedia. Expedia's public shareholders will also have the option of taking the USA package.