March 19 J.P. Morgan Securities downgraded
Expedia Inc (EXPE.O), the largest U.S. online travel agency, to
"neutral" from "overweight" and said increased competition and
pricing wars would cut into revenue and limit market share
Analyst Imran Khan said the company's recent decision to
waive booking fees on all flights booked through May 31 is
likely to become a permanent change, and expects it to result
in a $90 million decline in revenue in 2009.
Khan, who cut his price target on the stock to $9 from $12,
said no booking fees for air tickets have become somewhat the
"We now find it unlikely that this program will result in
market share gains to offset this decline," the analyst said.
Progress in international markets has also not been seen,
the analyst said.
"Despite significant investment in increasing international
hotel inventory and the acquisition of Venere, we have not seen
any increase in market share in Europe," Khan said.
Expedia agreed to buy Venere, an online travel agency
focusing on hotel reservations, in July last year.
Shares of Expedia, which have lost 62 percent of their
value in the last year, were trading down 7 percent at $7.56
Thursday morning on Nasdaq.
(Reporting by Mansi Dutta in Bangalore; Editing by Anne