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Expedia sees high-flying market debut

Shares of the online travel site surge on their market debut, rising more than 280 percent in trading on the Nasdaq.

Shares of the online travel site Expedia surged today on their market debut, rising more than 280 percent in heavy trading on the Nasdaq.

Expedia shares jumped to 53.44, up 39.44, giving the company a market value of about $2 billion. Shares reached a high of 65.88 earlier in the day on volume of 11.5 million. Yesterday, the company priced its shares at $14, surpassing the expected range for its initial public offering. The IPO comes as competition is heating up among Net travel firms and the airline industry.

Expedia, the first company software giant Microsoft has spun off from its operations, initially had a pricing range of $10 to $12 a share. Although one IPO analyst had forecast that the offering could be strong enough to fetch an increased range of $15 to $17 a share, the company never raised its range.

Expedia raised $72.8 million by selling 5.2 million shares, which are trading under the ticker "EXPE."

Microsoft will retain an 86.4 percent stake in the company. The travel site also will continue to maintain several agreements with Microsoft, such as its position on the MSN Web site, and no competition will occur between the companies for at least three years.

During the three months ended September 30, Expedia generated revenues of $15.3 million, compared with $6 million a year ago. The company's loss from operations shrank to $4.95 million in the quarter from $5.2 million a year ago.

Goldman Sachs is the lead underwriter.