Microsoft is selling the 75 per cent stake its still holds in online travel company Expedia to media conglomerate USA Networks in a stock deal worth $1.5bn.
The software giant launched Expedia, which is generally thought of as the world's second largest online travel company, in 1996 and took it public in 1999.
Microsoft has agreed to transfer all of its 33.7 million Expedia shares and warrants to USA Networks. The deal is the latest sale of a Microsoft-owned web property to USA Networks following its acquisition of Microsoft's Sidewalk City guides in 1999 for $240m in stock.
The remaining shares will come from existing share and warrant holders, and Microsoft will, in turn, own three to five per cent of USA Networks.
The media company, which owns a cable network, a film studio and the Home Shopping Network, also said it intends to buy National Leisure Group, an online cruise and vacation package agency.
Rick Belluzzo, president and chief operating officer at Microsoft, said in a statement: "Expedia will continue to be a strategic partner for MSN and Microsoft, while USA Networks can provide the breadth and depth in the travel and media industries that will help spur Expedia's future growth."
Rob Enderle, an analyst at Giga Information Group, said: "Microsoft does not want to be in the content business, they want to provide tools."
According to Enderle, the airline companies United, American and Continental have recently launched their own joint effort, called Orbitz, that will eclipse everything else.
"It's good to get rid of something before it becomes less valuable," he said. "[Microsoft chairman Bill] Gates is good at identifying things like this and he doesn't want to fight the fight."
With the Expedia acquisition, USA Networks chief executive Barry Diller will become chairman, while Expedia's Richard Barton will remain president and chief executive. The purchase is subject to the approval of Expedia's shareholders.
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