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Overhead Grounds Expedia

The online travel company sees its shares plunge.



fourth-quarter earnings fell 43% from a year ago, missing estimates and sending the stock plunging in late trading.

The tepid report from the Barry Diller-helmed online travel site continues a run of fourth-quarter earnings disappointments in the Internet sector. Expedia shares dropped 13%.

The Bellevue, Wash., company made $25 million, or 7 cents a share, for the quarter ended Dec. 31, down from the year-ago $44 million, or 13 cents a share. On a so-called adjusted basis, excluding certain costs, earnings dropped to 20 cents from 27 cents a share a year earlier, missing the 26-cent Thomson Financial estimate.

Sales rose 13% to $494.7 million, helped by acquisitions and gains in the hotel business, but fell short of the $505 million analyst survey.

In a statement, Chief Executive Dara Khosrowshahi said "the fourth quarter wasn't as strong as we hoped it would be, " though he added that the company is "investing to transform the way travelers plan, purchase and enjoy their trips -- again."

The Seattle-based company, which was spun off last year from Diller's huge



, also said it expects selling and marketing expenses to increase as a percentage of revenue. It wasn't more specific. Diller is Expedia's chairman and senior executive.

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Expedia's pratfall adds to a quarter in which








all posted results that disappointed investors. IAC posted a solid quarter but unnerved Wall Street with talk of the need to reinvest in its businesses.

Expedia shares dropped $2.66 to $21.17 in after hours trading.