10% of total travel bookings are done online, and of those, 10% passes through Expedia's (NASDAQ:EXPE) widely distributed websites. In other words, the combination of Expedia.com, Hotels.com, Hotwire.com, Classic Vacations, eLong, and TripAdvisor only govern 1% of the entire travel market worldwide.
Needless to say, Expedia has a great opportunity for growth in all markets. With the travel segment of the US economy purring (with the exception of fuel prices and consequently airlines), Expedia is well positioned to benefit from the summer travel season. Its book value is a pretty $17.50 per share, while earnings growth is a spectacular 49%.
One concern I have is the measly 11% revenue growth, and this is primarily due to a flat US domestic travel market. In their most recent quarter, growth came primarily from Europe, but the company seems to be making investments in the right areas with their recent announcement to purchase Bookingbuddy.com, SeatGuru.com, Travelpod.com etc.
They are also signing on additional travel partners (Frontier Airlines, Omni Hotels and Hertz) to expand their offerings. Finally, Expedia recently entered into a partnership with Citigroup (NYSE:C) to offer rewards for eligible bookings. I believe Hotels.com will soon follow with an exclusive rewards program of its own. With over 24 million visitors to their TripAdvisor.com site, and cross-promotion opportunities across their sites, Expedia is the best travel bet going forward. And if they get bought out by someone like Yahoo! (NASDAQ:YHOO) or private equity, that's an added bonus.
EXPE 1-yr chart: