Expedia to split into two companies

The travel firm announces today that it will become two separate entities, Expedia and TripAdvisor. It expects to complete the spin-off in the third quarter of 2011.

Expedia is splitting into two companies, Expedia and TripAdvisor, the travel firm announced today.

Under its Expedia brand, the company will conduct both domestic and international operations through Expedia.com, Hotels.com, Hotwire, and others. The second company, TripAdvisor, will be made up of TripAdvisor.com, as well as "18 other travel media and advertising brands." Both entities will be publicly traded.

TripAdvisor was acquired by InterActive Corporation (IAC) in 2004. It spun off under the Expedia name in 2005. Since then, Expedia has been performing relatively well. In 2009, the company generated a profit of more than $299 million on $2.9 billion in revenue. Last year, it posted a $421.5 million profit on more than $3.3 billion in revenue.

Though both TripAdvisor and Expedia are part of the ever-growing online travel sector, the former is designed to provide travelers with information and advice. Expedia is a place to find deals on travel. And it's that core difference that Expedia seems to want to highlight with this move.

When Expedia spins off TripAdvisor, the agreement will be tendered in "the form of a distribution of stock of TripAdvisor to Expedia stockholders," the company said. The deal requires approval from Expedia's Board of Directors and is expected to close in the third quarter.

Expedia did not immediately respond to request for comment.

As of this writing, Expedia's stock is up $2.95 per share to $25.47 in after-hours trading.

 

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