• The Wall Street Journal, Friday, November 10, 2006 12:30 PM

It looks like Barry Diller and IAC/InterActive Corp. got out at the right time: Expedia, Inc., a former IAC unit, reported a profit decline of 28% in the third quarter, citing slower growth in domestic booking and the elimination of interest income from IAC. The company reported net income of $59 million, down from $82 million last year. Domestic gross bookings actually increased slightly, but sales were offset by rising costs.

It's still the leader in online travel, which as a sector is seeing its margins squeeze. Airlines are finding it easier to fill flights themselves, and have reduced the commissions they pay to Expedia and Travelocity. Hotel chains offer promotions that include combined hotel/trip packages at reduced rates. More consumers are going to travel sites to conduct research, then moving on to airline Web sites to make purchases.

So how will the company improve things? Chief executive Dara Khosrowshahi said Expedia would focus on driving more sales to its Web site through a mix of revamped marketing and a "significant new loyalty program" that was launched last week. That program could help it steal back some market share from rivals Orbitz and Travelocity.

Read the whole story at The Wall Street Journal »