Hardly shocking to read that IAC-controlled Expedia is possibly looking to buy-back $3.5 billion in stock or up to 42% of the company at an offer of $30/share. The Financial Times also reports that there are rumours the company may spin out it’s TripAdvisor unit and eliminate up to 400 positions. In an odd turn, given that they don’t normally comment about such things, the company has denied these rumours.

Given that Expedia’s domestic growth has essentially stopped (1% revenue increase in Q1) and it’s international growth is underwhelming (25% growth looks fine, but it’s a far cry from the triple-digit stuff of not-too-long ago and on a small base, to boot) you can easily see why it’s valuation might be under scrutiny.

Layer in the fact that the only real share price growth Expedia has seen since it was spun out the second time, about two years ago, appears to have been the last stock buy-back, and that IAC’s principle investor and Diller’s friend John Malone’s Liberty Media might well be wondering where their money is, and you can easily see why another buy-back might be in the cards.

Finally, the pressure on the model itself is intense. Strong competition from Travelocity,Orbitz and other third party players, the growing power of suppliers who want to control their distribution, the rise of meta-search tools like Kayak and SideStep, plus overall category maturation and you don’t have to squint too hard to see why getting the price up and getting out of Dodge might work out just fine.

UPDATE: Expedia has issued a release confirming this buy-back. However, this quote from Diller is beyond my ability to wrap my head around:

"With this action, we couldn't be clearer that the management and the Board of this company are confident in the value of Expedia and in its long term future," said Barry Diller, Expedia, Inc.'s Chairman and Senior Executive."

I guess maybe I'm just slow...