The company also has the benefit of a surging stock price. Expedia shares have jumped 65 percent this year, closing Thursday at $137.31 (they were down a bit Friday morning). Three-quarters of the HomeAway deal is in stock, with $1 billion paid in cash. It's expected to close in the first quarter of 2016.
With rival Priceline Group building up its vacation rental inventory and Airbnb aggressively expanding across the globe, acquiring HomeAway was the best way for Expedia to play in the red-hot home rental market. Evercore ISI estimated in April that the addressable market is $100 billion in terms of annual bookings, with the majority of it still "up for grabs."
HomeAway, whose properties include VRBO and VacationRentals.com, drives $15 billion a year in bookings and is on pace to generate about $500 million in revenue in 2015.
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"These acquisitions are consistent with our expectation that Expedia will engage in M&A to support revenue growth in a highly competitive and consolidating online travel space," wrote Stephen Sohn, a credit analyst at Moody's Investors Service, in a report.
Just how silent has the rest of the Internet sector been?
Facebook hasn't had a $1 billion deal since buying virtual reality company Oculus for $2 billion in June 2014 and the $19 billion purchase of WhatsApp four months later. Both were announced in the first quarter of last year.