While Wall Street continues to take a wait-and-see approach about the potential merger of USA Networks (Nasdaq: USAI) and Lycos (Nasdaq: LCOS), USA Networks is busy adding to its e-commerce arsenal. USA Networks announced today that it has agreed to purchase the privately held Hotel Reservation Network, a leading worldwide provider of discount hotel accommodations via the Internet.
Financial terms were not disclosed, but Hotel Reservation Network co-founders Robert Diener and David Litman will remain president and CEO. The transaction is expected to close in June of 1999.
Hotel Reservation Network offers accommodations at discount rates in more than 600 hotels in 34 cities worldwide. The company has also partnered with more than 1,000 travel-related sites through its affiliate program. In addition to offering lower rates, the company also uses its buying power to offer customers reservations that may be otherwise hard to get during heavily trafficked period.
Profitability Attracts USA Networks
“Not unlike many interactive companies, HRN has had zooming growth since it offered Internet services in 1995,” said Barry Diller, chairman and CEO of USA Networks. Unlike many others, it has substantial revenues and profits.”
Hotel Reservation Network, which also offers reservations via phone, did not reveal specific profit numbers, but says Internet revenues account for approximately 70 percent of the company’s total revenue.
Ticketmaster Online Sales UpNearly 275 Percent
In related news, Ticketmaster Online – Citysearch (Nasdaq: TMCS), a company that has USA Networks as a primary shareholder, reported a sharp increase in ticket sales in the first quarter of 1999. In an announcement made today, the company reported that it sold 1.6 million tickets, an increase of almost 275 percent compared to the same period last year. The 1.6 million tickets had a combined value of nearly $60 million (US$).
Through its exclusive agreement with Ticketmaster Corporation, Ticketmaster Online-CitySearch features exclusive online ticketing to more than 3,750 clients, 100 sports teams, and 150,000 events each year.
Shares of USA Networks were up 1-13/16 to 42 in early trading today. The stock is approaching its 52-week high of 44-11/16. Meanwhile, shares of Ticketmaster Online-Citysearch were up 9-16 to 42-1/116.