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Expedia wants to take on Priceline, and it just scooped up competitor site Orbitz to do it.
In an announcement, the company said it plans to buy Orbitz for $12 a share. Along with the main site Orbitz.com, Expedia will also take on CheapTickets, ebookers, and HotelClub, among other properties.
This is just Expedia’s latest purchase. Last month, the company bought Travelocity, owned by Sabre Corporation for $280 million.
Undoubtedly, Expedia is building up its reserves to tackle it’s biggest competitor: Priceline. Known for its commercials featuring actor William Shatner, Priceline Group includes Booking.com, priceline.com, agoda.com, KAYAK, rentalcars.com, OpenTable, and its signature site Priceline.com.
Expedia has nine brands of its own, which include Hotwire, Hotels.com, and CarRentals.com. But, in its last earnings statement the company said that a rise in customer acquisition costs led to lower than expected revenues.
It’s possible that the main problem for Expedia is a matter of brand recognition, which Priceline has in spades. The acquisition of Orbitz could potentially mitigate this problem by getting Expedia properties in more places and thus in front of more eyes. However, to really beat Priceline, the company will need to figure out a cost-effective way to lure in new customers.
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