Expedia, the online travel agency formerly launched by Microsoft, Wednesday announced the initial public offering of its common stock on the US' Nasdaq National Market under the trading symbol EXPE. The 5.2 million shares initially priced at $14. Goldman, Sachs & Co. and Morgan Stanley Dean Witter are joint book-running managers for the offering. Expedia said 14 percent of the company was sold off, with Microsoft holding the remaining shares.
Expedia, which reported a loss of $29.5m (£18.3m) on sales of $13.8m in fiscal 1998, provides a variety of online travel services for leisure and small-business travellers. It has localised versions of its site in the United Kingdom, Germany and Canada.
With more than seven million registered users in August, Expedia could prove to be a potent competitor for the likes of Priceline.com, Preview Travel and Cheaptickets.com.
Brad Chase, vice president of Microsoft's Consumer and Commerce Group, said the Expedia spinoff was part of larger strategy to nourish market segments -- in whatever way is appropriate."The question is how do we make these marketplaces blossom and integrate them into MSN," Chase said during a daylong briefing Thursday in Seattle in which the company outlined its evolving Internet and consumer strategies. "Are we going to do spinoffs in other marketplaces? Sure."
Chase noted, however, that spinoffs were but one option the company would deploy. Depending on the market, it would engage in partnerships, as it has done with Ford. Or it could take the form of equity investments, as it has done with WebMD.
Microsoft launched Expedia in October 1996. In the year ended 30 June, Expedia reported sales of $38.7m and a loss of $19.6m.
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