Expedia Expands Into France

Expedia's airline, hotel, train and car reservation services will be available on SNCF's Web site, which Expedia says is the top travel site in France, reaching 10.2 percent of the country's online population. The site, Voyages-sncf.com, saw revenue of 91 million euros last year, and expects to record 167 million euros in revenue this year (approximately US$150 million).

"The Voyages-sncf.com site already receives a tremendous amount of traffic with its current train bookings and editorial information offerings," said Expedia senior vice president Simon Breakwell. "By adding valuable flight, lodging, and car rental services, the joint venture will create a new competitor in the online travel industry."

SNCF owns 53 percent of the joint venture, while Expedia holds a 47 percent stake. The companies did not say how much money they would invest. The two did say that they aim to have the revamped Web site up and running by the end of this year.

Continental Divides

Andy Greenman, a senior analyst for Yankee Group in London, said the venture is "definitely a good move in terms of Expedia raising its profile" in Europe, as SNCF runs one of the continent's most popular Web sites.

The European online travel market, however, is developing in a very different way from the North American one, Greenman told the E-Commerce Times. While European dot-com travel companies are "a couple of years behind" their U.S. counterparts, "you have a more balanced development of platforms beyond the PC."

Interactive television is proving to be a big base for European travel marketing, according to Greenman. Yankee predicts digital TV will surpass PC-based Internet use among European home users by 2005.

Already, text service provider Teletext accounts for about 10 percent of the UK's total sales of travel products, Greenman said. Eventually, companies will be able to provide "click-through" services allowing viewers of TV travel shows to click on Web sites providing information and services relating to the shows.

Ready for Takeoff

In any case, as in the United States, the online travel market is booming in Europe, and companies are moving to gain market share. Jupiter Media Metrix said that between November and April, the number of Europeans using travel Web sites rose by almost 4 million, and studies have predicted the market will continue to grow.

Last month, UK online travel agency eBookers and online auctioneer QXL.com said they would promote each other's travel services across Europe. Additionally, a group of European airlines is planning a travel Web site -- dubbed Opodo -- which they plan to launch in the UK, Germany and France.

Making Money

In the meantime, online travel companies remain among the few money earners in the e-commerce arena. In July, Expedia reported that revenue for the quarter ended June 30th more than doubled from a year earlier, as a weak U.S. economy fueled demand for bargain travel services.

Income before stock option expense and amortization of goodwill and intangibles totaled US$15 million, compared with a loss of $13.1 million, or 30 cents, in the same period last year and above the 20 cents predicted by analysts. The net loss narrowed to $4.4 million, or 9 cents per share, from $42.4 million, or 98 cents.

Expedia said all its business segments grew during the quarter, and it expects the good times to continue in coming months. The company predicted income before non-cash items will reach $10 million to $12 million in the current quarter and $11 million to $13 million the year after that.

Changing Hands

Expedia is getting a new majority shareholder later this year. In July, USA Networks agreed to purchase as many as 37.5 million Expedia shares, including more than 33 million shares and warrants held by Microsoft (Nasdaq: MSFT) , Expedia's initial backer.

Microsoft will retain a 3 to 5 percent stake in Expedia, and will continue to use the company as its online travel channel through June 2005.