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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dalin who wrote (51832)	5/21/2002 10:04:51 AM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

<<Let the bulls out of their pen....they need some exercise!>> LOL...I agree with you on that. Great to see you again Ramblin....stop over on The Porch more often. -Scott btw, I'm heading to Michigan for the holiday weekend and we should be putting the Sea Ray in the water...If the weather is nice we may do some sailing too...=)

To: Dalin who wrote (51832)	5/22/2002 2:14:40 PM
From: stockman_scott	Respond to of 65232

Battle heats up for travel Web sites Expedia stock falls as Orbitz files IPO By JOHN COOK SEATTLE POST-INTELLIGENCER REPORTER Tuesday, May 21, 2002 Shares of Bellevue-based Expedia Inc. fell 6 percent yesterday after rival online travel Web site Orbitz Inc. filed to raise as much as $125 million through an initial public offering. The IPO filing was expected. But it does signal that the battle to sell airline tickets, rental cars and hotel rooms over the Internet is heating up. It also shows that Orbitz is trying to duplicate the success of Expedia, whose stock has more than doubled in value this year. "History tells you that you should go public when the iron is hot," said R. Bailey Dalton, an analyst at C.E. Unterberg, Towbin. "Given the momentum that Expedia has experienced and the P/E (price-to-earnings ratio) that the stock is trading off, (Orbitz is) going at a very opportunistic time." Chicago-based Orbitz -- backed by five of the country's biggest airlines -- has quickly grown into the third-largest online travel agency since its launch last June. It already boasts 6 million registered users, 42 airline partners and gross bookings of $542 million in the first quarter. Expedia, the largest online travel agency, reported gross bookings of $1.1 billion in the first quarter. Travelocity.com, the No. 2 online travel agency owned by Sabre Holdings Corp., reported gross bookings of $783 million. Shares of Expedia fell $5.54 yesterday to close at $78.36. Expedia, spun off from Microsoft in a November 1999 IPO, was purchased by USA Networks Inc. in February. Although Orbitz has come on strong in the past 11 months by offering discount fares, analysts said Expedia has several things going its way. Not only is Expedia profitable with a longer operating history, but it also has the ability to offer discount fares through special agreements with airlines, Dalton said. "(They) have a combination of technology, breadth and depth of product and I think people actually like the site the best," Dalton said. "There are a number of competitive advantages that Expedia has over Orbitz." Because Orbitz is backed by five of the biggest airlines, the IPO filing comes at a time when the company is facing scrutiny from government agencies. The Department of Justice and Department of Transportation are investigating the company's business practices as are several states. That could lead to additional legal troubles, Orbitz wrote in its filing. "We expect that our competitors will continue to engage in lobbying and other activities, with the objective of generating negative publicity about Orbitz and pressing legislation or regulation that could be harmful to us," the company wrote. "These activities may result in private or governmental litigation against Orbitz, in further investigations of our business by various governmental authorities, or in the adoption of laws and regulations that make it more difficult for us to compete effectively, particularly as we implement new initiatives designed to enhance our competitive position." The online travel industry is the largest consumer spending category on the Internet, accounting for $24 billion of the $220 billion travel industry. The category is expected to more than double in the next five years to $64 billion, according to research firm Jupiter Media Metrix. As more consumers buy airline tickets and cruise ship packages online, Expedia, Orbitz and Travelocity.com will co-exist, predicts Paul Keung, an analyst for CIBC World Markets. "When the market is going to double over several years, one company may grow a little faster," said Keung. "But at the end of the day, there is plenty of room for growth." Orbitz, which last year lost $103.2 million on revenues of $43.4 million, did not disclose how many shares it will sell or the offering price. It plans to trade on the Nasdaq market under the ticker symbol ORBZ. Credit Suisse First Boston and Goldman Sachs & Co. will lead the offering. Proceeds from the sale will be used for general corporate purposes, with a portion possibly being used for acquisitions. ----------------------------------------------- P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattlepi.com