Filed by USA Networks, Inc. Pursuant to Rule 165 and Rule 425 Under the Securities Act of 1933 Subject Company: Expedia, Inc. Commission File No. 000-27429 Slide 1 (logo): USA Networks, Inc. Slide 2: Important This presentation contains forward looking statements relating to possible or assumed future results of USAi. It reflects the current views of USAi with respect to future events, and is subject to risks that could cause future results to materially differ. These risks are described in USAi's Securities and Exchange Commission filings. Information contained herein about entities other than USAi has been obtained from sources believed to be reliable, but no independent verification has been made and no representation is made as to its accuracy or completeness. Any statements non-factual in nature constitute current opinions, which are subject to change without notice. The forward looking statements and opinions in this presentation are made as of the date of this presentation, and USAi undertakes no obligation to update or revise them for any reason. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed in the future other than previously announced pending acquisitions. This presentation reflects estimates that USAi is comfortable releasing to analysts and the public as of the date hereof. Prepared 11/9/01. Read important disclaimer(s). Slide 3 (logo): USA Networks, Inc. Slide 4: Entertainment + Information + Direct Selling Entertainment Group: (logos) USA Networks, SCI FI, Trio, NWI, Crime, USA Films, Studios USA Interactive Group: Electronic Retailing: (logos) Home Shopping Network, America's Store, Home Shopping Espanol, Home Shopping Europe, Shop Channel, TVSN, HSN.com Information & Services: (logos) Ticketmaster, Citysearch.com, Match.com, Hotel Reservations Network, Styleclick, USA ECS, Precision Response Corporation, Expedia.com (transaction pending) Pro forma for pending Expedia transaction which has not yet closed, but which is expected to close by the end of 2001. Includes some companies majority or partially owned by USA. Prepared 11/9/01. Read important disclaimer(s). Slide 5: Unique Business Mix USA: 2/3rd Transactions (pie chart. largest to smallest slices): Electronic Retailing, Advertising, Services, Ticketing, Production & Films, Subscriptions, Hotel Reservations, Personals Revenue mix for Q3 2001. Prepared 11/9/01. Read important disclaimer(s). Slide 6: Revenue Through the Screen Television and Internet Consumer-related Revenues (U.S.) (pie charts): 1995 Revenue = $47 Billion Advertising = 80%, Transactions = 11%, Subscriptions = 9% 2000 Revenue = $134 Billion Advertising = 45%, Transactions = 39%, Subscriptions = 16% 2005 Revenue = $275 Billion Advertising = 25%, Transactions = 61%, Subscriptions = 15% Compiled estimates per MSDW, Jupiter, Shop.org, McCann Erickson, Zenith Media, Paul Kagan, Prudential, Furman Selz, PaineWebber, SSB, and Forrester. Prepared 11/9/01. Read important disclaimer(s). Slide 7: Interactive Strategy = Huge Value Prepared 11/9/01. Read important disclaimer(s). Slide 8: Current Market Valuation ($ and shares in millions) USA Commerce Companies = 13% Shares Outstanding* = 792 Current Price = 20 Equity Value = $15,840 Plus: Convertible Preferred* = 660 EBITDA Multiple Less: Net Cash* = (600) 2002 2003 --------------------- Enterprise Value = $15,900 15.0x 11.6x Less: Est. Value of Other Assets = (2,500) Adjusted Enterprise Value = $13,400 12.1x 9.9x * Pro Forma Other assets include HSN International, PRC, ECS, Styleclick, Citysearch, USA Films, TRIO, NWI, and Crime. Prepared 11/9/01. Read important disclaimer(s). Slide 9: Historical Stock Performance (graphic) line chart comparing stock performances of USAI, S&P 500, Nasdaq, DJIA and Diversified Entertainment January 1995 through July 2001 Source: MSN Moneycentral. Prepared 11/9/01. Read important disclaimer(s). Slide 10: 2000 Highs: And Then? Dotcom Collapse Advertising Slump Overall Weak Economy Credit Crunch September 11th Prepared 11/9/01. Read important disclaimer(s). Slide 11: Dotcom Collapse USA: 5 Profitable Internet Companies Estimated 2002 EBITDA ($ in millions) (graphic) bar chart eBay - $368 USA - $250 TMP Inter. - $182 iQVC - $123 Amazon - $93 Yahoo - $69 Travelocity - $41 1800Flowers - $25 Priceline - $12 Homestore - $10 CNET - ($19) Terra-Lycos - ($75) Prepared 11/9/01. Read important disclaimer(s). Slide 12: Advertising Slump USA: Only 14% Advertising (graphic) pie chart Transactions - 66% Subscriptions & Production Fees - 20% Advertising - 14% Revenue mix for Q3 2001. Prepared 11/9/01. Read important disclaimer(s). Slide 13: Weak Economy USA: Counter-Cyclical in Nature (logo) HSN: Low cost, "impulse" items (logo) Ticketmaster: Sports and entertainment access (logos) USA Network, SCI FI Channel - Subscription revenues locked in (logos) Expedia (transaction pending), Hotel Reservations Network - Online travel: Discounting & packaging (logo) USA ECS - Direct marketing and CRM Prepared 11/9/01. Read important disclaimer(s). Slide 14: Credit Crunch USA: $600 Million in YE Net Cash (graphic) bar chart Current = $420 million + To Come = approximately $200 million = approximately Year End = $600 million Does not include convertible preferred issuable in pending Expedia transaction. Prepared 11/9/01. Read important disclaimer(s). Slide 15: September 11th Hopefully, Short-Term Effects Prepared 11/9/01. Read important disclaimer(s). Slide 16 Intrinsic Value Prepared 11/9/01. Read important disclaimer(s). Slide 17: USA Entertainment Comparable Deal 2001E Multiple Fox Family 35x BET 22x Rainbow (MGM) 27x Golf Channel (Comcast) 25x Weighted Average 29x (logos) USA Network, SCI FI Channel, Studios USA Source: ABN AMRO (8/7/01). Prepared 11/9/01. Read important disclaimer(s). Slide 18: USA Electronic Retailing 2002E 2003E QVC EBITDA Multiple 16.5x 14.6x HSN EBITDA (US) $285 mm $350 mm Implied Value of HSN $4.5 Bn $5.1 Bn (logos) Home Shopping Network, America's Store, HSN.com QVC implied multiples based on average of various analyst research estimates, including Morgan Stanley, CS First Boston, Salomon Smith Barney, Deutsche Bank Alex Brown and ABN AMRO. Prepared 11/9/01. Read important disclaimer(s). Slide 19: USA Publicly-Traded Assets ($ in Billions) USA's Share 100% TMCS $1.4 $2.1 Expedia (Transaction Pending) 1.2 1.9 HRN 1.3 1.9 Total $3.9 Billion $5.8 Bn (logos) Ticketmaster, Expedia (transaction pending), Hotel Reservations Network Public market values as of 11/8/01. Reflects maximum participation by Expedia shareholders in pending transaction for illustrative purposes. Prepared 11/9/01. Read important disclaimer(s). Slide 20: Other Assets Estimated Value = $2.5 Billion (logos) Trio, NWI, Crime, Home Shopping Europe, Home Shopping Espanol, Styleclick, USA Films, USA ECS, Citysearch.com, Precision Response Corporation, Shop Channel, TVSN Source: Various analyst estimates, including Morgan Stanley, A.G. Edwards and UBS Warburg. Prepared 11/9/01. Read important disclaimer(s). Slide 21: Synergy Value (logos) Expedia (transaction pending) and Hotel Reservations Network (graphic) arrow pointing to: (logo) Ticketmaster - (graphic) arrow pointing to: (logo) Citysearch.com - (graphic) arrow pointing to: (logo) Match.com - (graphic) arrow pointing back to Expedia and HRN logos In center of circle: (logo) USA ECS - Database: 65 Million Prepared 11/9/01. Read important disclaimer(s). Slide 22: Synergy Value 2002 Attributable EBITDA of Publicly-Traded Assets: Ticketing $85 mm Match 14 mm HRN 60 mm Expedia (transaction pending) 41 mm Total $200 mm @ Ebay's 2002 EBITDA Multiple 40x = Implied Attrib. Value of USA's Publicly-Traded Assets $8 Bn @ 20% Discount $6 Bn Less: Market Value of USA's Publicly-Traded Assets ($4 Bn) = Implied Synergy Value $2 Billion USA estimates based on budget dated 10/24/01. Reflects maximum participation by Expedia shareholders in pending transaction for illustrative purposes. Source for Ebay multiple: public market values dated 11/8/01 and Goldman Sachs research dated 10/24/01. Prepared 11/9/01. Read important disclaimer(s). Slide 23 Total Intrinsic Value Expedia transaction pending. Prepared 11/9/01. Read important disclaimer(s). Slide 24 Greater Upside: Interactivity Direct Marketing Prepared 11/9/01. Read important disclaimer(s). Slide 25: Leading in Interactivity USA's Share of Transactions Through the Screen (graphic) bar chart Today = 9% Goal = 20% - 25% Compiled estimates per MSDW, Jupiter, Shop.org, McCann Erickson, Zenith Media, Paul Kagan, Prudential, Furman Selz, PaineWebber, SSB, and Forrester. Prepared 11/9/01. Read important disclaimer(s). Slide 26: Interactivity - Customers (logos) Home Shopping Network, Expedia (transaction pending), Match.com, HSN.com, Ticketmaster.com, Hotel Reservations Network USA Interactive Commerce companies include HSN (US), Hotel Reservations Network. Ticketmaster.com, Match.com and Expedia (transaction pending). Source for other company estimates include various published analyst and company information. Prepared 11/9/01. Read important disclaimer(s).
Current 2002E Users Gross Value Revenue EBITDA eBay 38mm Registered Users $12.3 Bn $1.0 Bn $368 mm AOL (ISP) 31mm ISP Subscribers $10.4 Bn $10.4 Bn $3.8 Bn Amazon 23 mm Active Customers $3.2 Bn $3.2 Bn $93 mm USA 20 mm Active Customers $7.5 Bn $3.2 Bn $510 mm QVC (US) 7 mm Active Customers $3.7 Bn $3.7 Bn $782 mm Slide 27: Interactive Commerce = $52 Billion (graphic) pie chart. largest to smallest slices: Travel, Computers /Software / Electronics, TV Electronic Retailing and Infomercials, Auctions / Collectibles, Mass Merchandise / Apparel / Other, Music / Video / Books, Flowers / Cards, Home / Office, Auto, Event Tickets, Food / Beverage, Personals 2000 Market data. Source: Shop.org (5/01), Jupiter (10/01) and Match.com estimates. Prepared 11/9/01. Read important disclaimer(s). Slide 28: PC / Electronics = $10 Billion (graphic) pie chart with Dell / Compaq / HP and Other Manufacturers and Retailers 2000 Market data. Source: Shop.org (5/01), Jupiter (10/01) and Match.com estimates. Prepared 11/9/01. Read important disclaimer(s). Slide 29: Market Opportunity = $43 Billion (graphic) pie chart. largest to smallest slices: Travel, TV Electronic Retailing and Infomercials, Auctions / Collectibles, Mass Merchandise / Apparel / Other, Music / Video / Books, Flowers / Cards, Home / Office, Auto, Event Tickets, Food / Beverage, Personals 2000 Market data. Source: Shop.org (5/01), Jupiter (10/01) and Match.com estimates. Prepared 11/9/01. Read important disclaimer(s). Slide 30: Future Opportunity Interactive Commerce Non-PC / Electronics (graphic) pie chart - 2000 = $43 Billion USA - 10% Ebay, QVC, Amazon, Travelocity, Priceline, TMP Inter., Others (graphic) pie chart - 2005 = $140 Billion USA - 25% Goal Ebay, QVC, Amazon, Travelocity, Orbitz, Priceline, TMP Inter., Others Source: Shop.org (5/01), Jupiter (10/01 and 4/00) and Match.com and other internal estimates. Prepared 11/9/01. Read important disclaimer(s). Slide 31 Greater Upside: Interactivity Direct Marketing Prepared 11/9/01. Read important disclaimer(s). Slide 32: Multichannel Database 65 Million - - Travel - - Short Shopping - - Electronic Retailing - - Online Commerce - - Personals - - Reservations - - Ticketing - - Local Information & Services Source: ECS. Prepared 11/9/01. Read important disclaimer(s). Slide 33 (logo): USA Networks, Inc. Focused on the new convergence of entertainment, information, and direct selling. Slide 34 (logo): USA Networks, Inc. A Nasdaq 100 and Fortune 500 Company. Slide 35: Important USA Networks, Inc. ("USA") and Expedia, Inc. ("Expedia") have filed a preliminary joint prospectus/proxy statement and will file other relevant documents concerning USA's acquisition of Expedia with the Securities and Exchange Commission ("SEC"). INVESTORS ARE URGED TO READ THE JOINT PROSPECTUS/PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED IN THE FUTURE WITH THE SEC BECAUSE THOSE DOCUMENTS CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain such documents free of charge at the SEC's website at www.sec.gov. In addition, such documents may also be obtained free of charge by contacting USA Networks, Inc., 152 West 57th Street, New York, New York, 10019, Attention: Investor Relations, or Expedia, Inc., 13810 SE Eastgate Way, Suite 400, Bellevue, WA 98005, Attention: Investor Relations. Prepared 11/9/01. Read important disclaimer(s).