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Press ReleaseFinance


IAC/INTERACTIVECORP TO ACQUIRE HOTWIRE - LEADING INTERACTIVE COMPANY TO FORM
SINGLE TRAVEL DIVISION, IAC TRAVEL, ENCOMPASSING EXPEDIA, HOTELS.COM AND HOTWIRE


IAC ALSO ANNOUNCED THE FORMATION OF A SINGLE TRAVEL DIVISION, IAC TRAVEL

IAC/InterActiveCorp
6 min read21 September 2003
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IAC/InterActiveCorp IACI today announced it has entered into an agreement to
acquire Hotwire.com, a leading discount travel web site. The consideration is
$665 million in cash plus the assumption of approximately $20 million of options
and warrants. IAC estimates 2003 full year Gross Bookings for Hotwire of
approximately $700 million and Net Revenue of approximately $110 million, and
expects the transaction to be slightly accretive to 2004 adjusted EPS. Following
the acquisition, Hotwire will remain a separate subsidiary and brand within IAC.

Founded by Texas Pacific Group and airlines American, America West, Continental,
Northwest, United and USAirways, Hotwire is an industry leader in 'opaque'
travel, a service that enables online consumers to see and choose a specific
fare or rate without knowing the brand of the supplier until after the item is
purchased. This model enables Hotwire to offer discounts of up to 45 percent on
airfares, and up to 75 percent on hotel rooms. Hotwire directly addresses the
needs of a significant segment of the overall travel market: a recent report
from Forrester Research notes that 19 percent of web travel bookers buy on price
alone, without consideration of individual airline or hotel brands.(1)

"There is a tremendous potential for growth online, including opaque and
price-sensitive travel segments," said Erik Blachford, President and CEO of IAC
Travel. "As the fastest growing opaque travel web site, Hotwire is a compelling
addition to the IAC Travel portfolio. We are deeply impressed with everything
accomplished by Karl Peterson and the Hotwire team to date, and are excited
about adding more fuel to their entrepreneurial fire."

Hotwire President and CEO Karl Peterson added, "Hotwire consistently offers
lower prices for leisure travelers because of our opaque model, and we have a
significant advantage over other opaque offerings because we do not require
consumers to engage in a bidding process. For suppliers, the value proposition
is clear, they can drive incremental and profitable business by providing
discounted inventory without harming their published prices or impacting their
brands. Becoming a part of IAC Travel will enable Hotwire to maintain our
position as a profitable and fast growing opaque travel site."

The transaction is expected to close during the fourth quarter of 2003, subject
to customary regulatory approvals.

IAC Travel - IAC also announced the formation of a single travel division, IAC
Travel, that will consist of the following IAC businesses: Expedia.com, Expedia
Corporate Travel, Classic Custom Vacations, Newtrade Technologies, Expedia's
international brands and private label offering WWTE; Hotels.com and its
affiliated brands including Travelnow.com; Interval International, TV Travel
Shop; and Hotwire. All companies will remain independent brands within IAC
Travel. Erik Blachford, President and CEO of Expedia, will lead IAC Travel as
President and CEO. Hotels.com President Bob Diener, Hotels.com CEO Dave Litman,
and Hotwire president and CEO Karl Peterson will report directly to Mr.
Blachford.

Barry Diller, Chairman and CEO of IAC, said "Erik Blachford is a great
executive...having been given the reins of Expedia such a short time ago from
its founder, he has swiftly, sensitively, and confidently taken control of the
company. It is those qualities, together with being a perfect pitch marketer and
businessman, that make him truly the perfect choice to lead our consolidated
travel assets."

Mr. Diller continued, "It is not so long ago that these online travel services
didn't exist - it ought to be now clear to all that they will stand the test of
time and play an increasingly important role in every aspect of the travel
experience. The brands of IAC Travel, from Expedia.com, Expedia Corporate
Travel, Classic Custom Vacations, Newtrade Technologies, Expedia's international
brands and private label offering WWTE; Hotels.com and its affiliated brands
including Travelnow.com; Interval International; TV Travel Shop; and Hotwire
give this company the ability to be a long term leader in an area that is still
in its infancy...travel is the largest business sector in the world, and this
company is every year going to increase its share of that activity and in so
doing will ensure that IAC is reaching its goal to become the largest and most
profitable interactive company in the world by pursuing a multi-brand strategy."

About Hotwire.com - Hotwire.com is a leading discount travel site with
consistently lower prices on airline tickets, hotel rooms, rental cars, cruises
and vacation packages. Launched in 2000, Hotwire negotiates deep discounts from
its travel suppliers to help sell their excess inventory. Hotwire is a
profitable, private corporation based in San Francisco, California. Hotwire was
founded by Texas Pacific Group and airlines American, America West, Continental,
Northwest, United and USAirways. For more information, visit www.hotwire.com.

About IAC/InterActiveCorp - IAC/InterActiveCorp IACI, formerly USA Interactive,
consists of IAC Travel, a division of the company that encompasses Expedia,
Inc., which oversees Interval International, TV Travel Shop, Hotels.com and
Hotwire.com. IAC has entered into an agreement to acquire Hotwire, which is
expected to close during the fourth quarter of 2003, subject to customary
regulatory approvals. The other operating businesses of IAC are: HSN;
Ticketmaster, which oversees Evite and ReserveAmerica; , which oversees ;
Entertainment Publications; Citysearch; Precision Response Corporation; and
LendingTree. The goal of IAC is to be the world's largest and most profitable
interactive commerce company by pursuing a multi-brand strategy.

(1) June 6, 2003, Forrester Research Report "Brands Don't Matter to Web's
Mercenary Travelers"

Important Disclosures - This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include the information relating to possible or
assumed future results of operations of IAC and its subsidiaries, including
those preceded by, followed by or that include the words "believes," "could,"
"estimates," "intends," "expects," "anticipates" or similar expressions. These
statements reflect the current views of IAC with respect to future events, and
are based on information currently available to IAC. These forward-looking
statements are subject to risks, uncertainties and assumptions that may affect
the operations, performance, development and results of IAC's and its
subsidiaries' business. Please see the important factors described in IAC's
filings with the Securities and Exchange Commission which could affect the
future results of IAC and its subsidiaries, and could cause those results to
differ materially from those expressed in the forward-looking statements
contained in this press release. You are cautioned not to place undue reliance
on these forward-looking statements, which are made as of the date of this press
release. IAC does not undertake any obligation to update or revise the
forward-looking statements contained in this press release, whether as a result
of new information, future events or any other reason.

Deborah Roth
212/314-7254
IAC/InterActiveCorp

FinanceSales & MarketingUnderstanding Online Distributionwiredhotelier.com

IAC/InterActiveCorp

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