Bellevue-based Expedia Inc. on Thursday announced plans to separate into two publicly traded companies, TripAdvisor and Expedia Inc., both prominent players in the online travel-booking industry.
Expedia, which itself was spun off from a division of Microsoft in 1996, includes in its portfolio of companies a number of travel brands, including TripAdvisor LLC. Expedia's board of directors now has preliminarily approved a plan to split the company into two publicly traded companies later this year.
Expedia operates a booking engine website where members can research and book airline tickets, hotel reservations, car rentals, cruises and many other in-destination services from a broad selection of partners. Following the spinoff, Expedia will continue to operate its transaction sites, including Hotels.com, eLong, Hotwire, Egencia, Expedia Affiliate Network, CruiseShipCenters, Venere, Classic Vacations and carrentals.com, the company said in a statement.
Though TripAdvisor also links travelers directly to booking sites, its focus is on providing reviews and advice through a large travel community, and listings are ranked by traveler review. TripAdvisor's TripAdvisor Media Group has 18 travel media and advertising brand websites, including more than 45 million travel reviews and opinions and more than 6 million traveler-supplied photos and a directory of more than 1 million businesses in more than 85,000 cities.
The transaction is subject to final approval by Expedia’s board but likely will take place in the form of a distribution of TripAdvisor stock to Expedia stockholders or a reclassification of Expedia stock, with current stockholders receiving a proportionate amount of TripAdvisor stock in a tax-free transaction, according to the statement.
The spinoff is expected to be completed in the third quarter of 2011, Expedia said.
TripAdvisor has about 50 million unique monthly visitors over 50 websites in 29 countries, and it generated $486 million in revenue in 2010. Overall, Expedia reported net income of $421.5 million, or $1.46 per share, on revenue of $3.5 billion last year, with gross bookings of $25.9 billion.
Shares of Expedia rose 13 percent to $25.40 in extended trading Thursday.
Expedia, whose headquarters are downtown, employs about 8,900 people worldwide.