Expedia has acquired the once leading online travel site Travelocity for what some might describe as an underwhelming $280 million. After reports of the deal surfaced previously, the acquisition was confirmed in an SEC filing this morning.
Purchased from its parent company Sabre Holdings, Expedia's move on Travelocity is two fold. It is looking to keep its rival Priceline at bay as well as evolving its already lucrative relationship with the Travelocity brand even further.
Expedia CEO and President Dara Khosrowshahi cited Travelocity's strong brand recognition, having booked trips for more than 20 million travelers per month in North America, as one if the main selling points. The companies were already doing business together within a strategic marketing agreement that married "Travelocity's strong brand" with Expedia's "best-in-class booking platform, supply base, and customer service," the CEO said. In other words, Expedia was already pulling in 50% of Travelocity's revenue in exchange for running its back-end services, according to reported numbers.
Expedia, which is currently worth $10.8 billion, stands to gain fairly significant marketshare from the deal, but we will have to wait until early next month for 2014 results numbers.