Expedia to buy Orbitz for $1.6 billion

The company is buying market share to sustain profit

Cheaper air travel is making the world seem smaller -- and that's increasingly the case for the online booking market too, with Expedia planning to swallow up rival Orbitz Worldwide barely a month after buying the smaller Travelocity.

Expedia operates online booking services for flights, car rentals and hotels, including the Hotels.com brand, while Orbitz offers similar services under its own brand and at Ebookers.com and Hotelclub.com.

For Expedia, the acquisition is primarily about growing its customer base: The companies offer similar services in overlapping markets. Orbitz also operates "white label" travel booking services for airlines and bank loyalty programs through its Orbitz Partner Network.

Orbitz directors have advised stockholders to accept Expedia's offer of US$12 per share, which values the company at around $1.6 billion.

In late January, Expedia exercised a long-standing option to buy Travelocity, another online booking service, for around $280 million. Expedia already provided the underlying booking engine for that company's North American websites.

Last week, Expedia reported a decline in operating income and net profit, even as the growth in booking volumes accelerated. Its margins are declining and it needs to grow the business to maintain profit growth.

Peter Sayer covers general technology breaking news for IDG News Service, with a special interest in open source software and related European intellectual property legislation. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsinternetbusiness issuese-commerceindustry verticalstransportationtravelocityExpediaOrbitz Worldwide

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Peter Sayer

Peter Sayer

IDG News Service
Show Comments

Essentials

Mobile

Exec

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?