Liberty Holding Onto Expedia

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New York -- When Liberty Media Corp. spins off its interactive assets into a new tracking stock next year, it won’t include the media giant’s investment in online travel behemoth Expedia Inc.

Liberty said in November that it would spin out its interactive assets in a new tracking stock to be called Liberty Interactive by the end of the first half of 2006, including its QVC Inc. shopping channel, its stake in InterActiveCorp and its interest in Expedia.

Liberty’s remaining assets -- Starz Entertainment Group LLC, On Command Corp., True Point, WildBlue Communications Inc., its stock holdings in several media companies including News Corp. and its interests in cable networks GSN and Court TV -- would remain with the old company, to be renamed Liberty Capital.

At the UBS Warburg LLC Global Media Conference here Tuesday, Liberty senior vice president and treasurer Dave Flowers told the audience that the company changed its mind about Expedia, opting to keep it within Liberty Capital once the spin is completed.

“The reason we moved it back over to [Liberty] Capital is that we just felt that its growth and the business it is in doesn’t fully complement what QVC and IAC are doing,” Flowers said. “Similar to how IAC split it apart from its core assets, we think it has great upside and is a tremendous company, but we think it can grow on its own within that space and really would kind of get lost on the interactive side.”

IAC spun out Expedia in August.

Flowers also said putting Liberty’s substantial number of News Corp. voting shares -- it owns 18% of News Corp.’s votes -- in the smaller Liberty Capital “gives us a little more time to think about any potential structures with News Corp.”

Flowers added that after the tracker is spun off, Liberty Interactive could use its new currency for acquisitions. He said that while no deals are imminent, possible targets are companies that would complement QVC’s video presence, such as e-commerce companies involved in gifts and jewelry.

“I think [potential acquisitions] would be more skewed toward interactive, where you’re in touch with the customer via the Internet or via the TV,” he said.

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