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How Expedia Took Out Travelocity

Travelocity's Roaming Gnome was spotted in April in Indio, Calif.
Travelocity's Roaming Gnome was spotted in April in Indio, Calif.Photograph by Alexandra Wyman/Invision for Travelocity via AP Images

It may be too soon to bury Travelocity, but it appears an opportune time to write its obituary. Under a long-term agreement, online competitor Expedia will power the search results on Travelocity, which will be paid for whatever traffic it sends to the larger company, much as Internet searches on Yahoo! are “powered” by the Bing search engine.

The agreement comes amid widespread speculation that Sabre Holdings, which owns Travelocity, is preparing for an initial public offering that might take place as soon as 2014. Texas-based Sabre operates one of the major global distribution systems (GDS) for airline reservations. These computerized platforms—which date to 1960, when Sabre and IBM launched the first such model—provide the data for flight information sold by travel agents, including online players such as Expedia and Priceline.com.