Expedia 2008 Annual Report Download - page 9

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Equity Ownership and Voting Control
As of December 31, 2008, there were approximately 261,374,295 shares of Expedia common stock,
25,599,998 shares of Expedia Class B common stock and 751 shares of Expedia preferred stock outstanding.
Also as of December 31, 2008, Liberty Media Corporation (“Liberty”), through a wholly-owned subsidiary,
beneficially owned approximately 27% of Expedia’s outstanding common stock and 100% of Expedia’s
outstanding Class B common stock. As of such date, Barry Diller, Chairman and Senior Executive of Expedia
(through his own holdings and holdings of Liberty, over which Mr. Diller generally has voting control pursuant
to an irrevocable proxy granted by Liberty under the Stockholders Agreement described below) controlled
approximately 60% of the outstanding total voting power of Expedia.
Pursuant to the Stockholders Agreement, dated as of August 9, 2005, as amended, between Liberty and
Mr. Diller, Mr. Diller is effectively able to control the outcome of nearly all matters submitted to a vote or for
the consent of Expedia’s stockholders (other than with respect to the election by the Expedia common
stockholders of 25% of the members of Expedia’s Board of Directors and certain matters as to which a
separate class vote of the holders of Expedia common stock or Expedia preferred stock is required under
Delaware law). In addition, pursuant to the Governance Agreement, dated as of August 9, 2005, among
Expedia, Liberty and Mr. Diller, each of Mr. Diller and Liberty generally has the right to consent to certain
significant corporate actions in the event that Expedia or any of its subsidiaries incurs any new obligations for
borrowed money within the definition of “total debt” set forth in the Governance Agreement for as long as
Expedia’s ratio of total debt to EBITDA, as defined therein, equals or exceeds eight to one.
Portfolio of Brands
Expedia leverages its brand portfolio to target the broadest possible range of travelers, travel suppliers
and advertisers. Our brands provide a wide selection of travel products and services, from simple, discounted
travel to more complex, luxury travel. Our travel offerings primarily consist of airline flights, hotel stays, car
rentals, destination services, cruises and package travel, which encompasses multiple travel products. We also
offer travel and non-travel advertisers access to a potential source of incremental traffic and transactions
through our various media and advertising offerings on both the TripAdvisor Media Network and on our
transaction-based websites.
Expedia.com. Our Expedia-branded websites make a large variety of travel products and services
available directly to travelers through our U.S.-based website, www.expedia.com, as well as through localized
versions of the Expedia website in Australia, Austria, Belgium, Canada, Denmark, France, Germany, India,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden and the United Kingdom.
Expedia-branded websites target many different types of travelers, from families booking a summer vacation
to individual travelers arranging a quick weekend getaway. Travelers can search for, compare information
about (including pricing, availability and traveler reviews) and book travel products and services on Expedia-
branded websites, including airline tickets, lodging, car rentals, cruises and many destination services — such
as airport transfers, local attractions and tours — from a large number of suppliers, on both a stand-alone and
package basis.
Hotels.com. Our hotels.com website provides a broad selection of hotel properties to travelers, who can
plan, shop for and book lodging accommodations, from traditional hotels to vacation rentals. Hotels.com seeks
to provide travelers with premium content and service through our U.S.-based website, www.hotels.com, as
well as through localized versions in the Americas, Europe, Asia Pacific and South Africa. With hotels.com,
we differentiate our offering by positioning the brand as the hotel expert, with premium content about lodging
properties.
Hotwire.com. Our discount travel website, Hotwire.com, makes available airline tickets, hotel rooms,
rental cars, cruises and vacation packages. Hotwire.com’s approach matches flexible, price-sensitive travelers
with suppliers who have excess seats, rooms and cars they wish to fill without affecting the public’s perception
of their brands. Hotwire.com travelers may enjoy significant discounts by electing to book travel services
“opaquely,” without knowing certain itinerary details such as brand, time of departure and exact hotel location,
while suppliers create value from excess availability without diluting their core brand-loyal traveler base.
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