Travelzoo Sinks on Expansion Plan

Travelzoo (TZOO Quote) sank 4% Friday after the online travel publisher said opening offices in France, Hong Kong and Tokyo will hit earnings for the next two years.

"We are continuing to aggressively implement our strategy of turning Travelzoo into a global media brand," said CEO Ralph Bartel. "While we expect these initiatives to have a material negative impact on our earnings in 2007 and 2008, due to significant expenses related to subscriber marketing campaigns in new markets and operating losses during the start-up phase, we believe that it is an attractive strategy for Travelzoo in the long-term."

Shares fell $1.24 to $26.84.