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Monday, 16 July, 2001, 16:15 GMT 17:15 UK
Microsoft sells Expedia travel site
Expedia, the seventh-biggest online travel agent in the US
Microsoft has agreed to sell its 75% stake in online travel firm Expedia to media group USA Networks.

The deal reportedly values Expedia at $1.5bn (1.1bn), or $40 per share - about 10% below its current stock market valuation.

Expedia, one of the few firms to have made money in business-to-consumer e-commerce, is ranked as the US's seventh-largest travel agency, and has affiliates around the world, including the UK.

USA Networks, run by Hollywood mogul Barry Diller, operates a number of television stations as well as internet properties and said the move was part of a new focus on travel services.

On the same day, USA Networks bought online cruise and package holiday broker National Leisure Group.

"For some time we have believed travel to be a key building block in offering goods and services in interactive formats," Mr Diller said.

Mr Diller will become chairman of Expedia, while Richard Barton will stay on as president and chief executive officer.

Integration

USA will combine the two acquisitions with its stake in Hotel Reservations Network to create USA Travel Group, which it expects this year to generate gross bookings of around $4bn.

The company said it planned to launch the USA Travel Channel, a new cable television service offering a full range of travel products.

Expedia is expected to benefit from US Networks' cross-media muscle: under the current deal, it will be given airtime valued at $75m, as well as a chance to participate in the travel channel.

Microsoft will continue to hold a 3-5% stake in Expedia.

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