[Stu Hoss] Dara Khosrowshahi - Chief Executive Officer, Director Michael B. Adler - Chief Financial Officer, Executive Vice President

Imran Khan - J.P. Morgan [Douglas Amooth] - Barclays Capital Brian Fitzgerald - Banc of America Securities Mark Mahaney - Citigroup Justin Post - Merrill Lynch Jennifer Watson - Goldman Sachs Vance Edelson - Morgan Stanley Michael Millman - Soleil-Millman Research Assoc.

Welcome to the Expedia, Inc. third quarter 2008 conference call. During today’s presentation all parties will be in a listen-only mode. Following the presentation the conference will be open for questions. (Operator Instructions) As a reminder, this conference is being recorded today Thursday, October 30, 2008. I would now like to turn the conference over to Mr. [Stu Hoss]. [Stu Hoss]: Welcome to Expedia, Inc.’s financial results conference call for the third quarter ended September 30, 2008. I’m pleased to be joined on the call today by Dara Khosrowshahi, Expedia’s CEO and President, and Michael Adler, our CFO. The following discussion including responses to your questions reflects management’s views as of today, October 30, 2008 only. As always some of the statements made on today’s call are forward-looking including our comments on financial expectations and performance, operational results, margins, planned investments and spending, foreign exchange and growth of business lines. Actual results may differ materially. We do not undertake any obligation to update or revise this information. Please refer to today’s press release and the company’s filings with the SEC including our Forms 10K for the year ended December 31, 2007 and 10Q for the quarter ended June 30, 2008 for additional information about factors that could potentially affect our financial and operational results. During this call we will discuss certain non-GAAP financial measures including OIBA, operating expenses excluding stock-based compensation, free cash flow, adjusted net income and adjusted EPS. In our press release which is posted on the company’s IR website at www.expediainc.com/ir you will find additional disclosures regarding these non-GAAP measures including reconciliations of these measures with the most comparable GAAP measures. Finally unless otherwise stated, all references to gross margin, selling and marketing expense, general and administrative expense, and technology and content expense exclude stock-based compensation and all comparisons in this call will be against our results for the comparable period of 2007. With that let me turn the call over to Dara.

As always, thank you to everyone for making the time to join us on the call. Given your positive feedback on our abbreviated remarks in Q2, we’ve decided to continue that approach this quarter. We’re clearly living through an unprecedented period in financial and economic history. While government intervention has been aggressive, the measures taken to stem the tide will likely take some time to have an impact on the economy and in turn the consumer. As it relates to Expedia, the key development since Q2 is that the softness that we saw in the US and UK markets has extended to nearly all our geographies and all our key product areas; hotel, air, car and packages; now facing challenging dynamics. Even advertising and media, while still growing robustly, has slowed down in terms of traffic and click growth. Another key development is the acceleration and weakness as we moved through Q3 with a top line softening steadily through September and into October. In particular we saw distinct and broad step-down in transaction volumes during the week of the Lehman Brothers bankruptcy and AIG bailout, and we haven’t seen much of a rebound since. We also experienced a negative turn in currencies that meaningful hampered Q3 results, a trend we’ve unfortunately seen accelerate rather dramatically here in Q4. So what exactly does Expedia intend to do in these challenging times? We’re going to focus in five areas: First, more efficient marketing; second, improved conversion; third, better supply; fourth, growing our non-transaction revenue; and fifth, lowering our costs. In marketing we’re going to harvest our SCO investments, improve monitoring the long tail of our search engine marketing efforts, export our targeted email successes from the US to Europe, and better align our brand span with the demand trends that we’re seeing. The improved conversion will continue to drive transactions through differentiated offerings such as reducing our hotel fees, eliminating change cancel penalties, and promotions such as our gas card. We’ll also continue to drive our global loyalty programs and optimize our sites to improve the conversion rates. We’ve seen some success here with www.hotels.com. In supply [inaudible] not only adds meaningful supply to our existing roster but gives us a very effective recruiting tool going forward especially in Europe. On the non-transaction revenue front, while we recognize transactions may be harder to come by, we’re going to improve monetization regardless by expanding ad revenue streams on our transaction sites as well as increasing traveler adoption of high margin products such as insurance waivers and co-brand credit cards. Finally in the area of costs, our initial focus will be a real laser focus on variable cost reductions starting with our air fulfillment costs, merchant fees and lower cost per transaction in our call centers. In addition we’ll be scrutinizing every piece of spend and investment for more near-term returns and ensuring that we appropriately size the expense burden of the company to however the demand picture unfolds. Real briefly on capital structure and uses of capital. Our long-term philosophy on these matters has not changed. Expedia can responsibly support greater leverage yet given the current state of the economy and capital markets, we will move forward with a greater emphasis on capital preservation and liquidity. A final note before I turn the call to Mike. I think we’ve consistently been as candid and realistic as any management team in acknowledging the headwinds in our business, and it’s in that spirit that we’re acknowledging today that this is without a doubt the most difficult operating environment that we’ve seen. But make no mistake; we have a powerful franchise here at Expedia with the most recognized and valuable brands in travel, the broadest geographic footprint, the most diverse collection of platforms for our advertiser and supply partners, and more importantly than ever in this environment, considerable cash flow and a conservative balance sheet that afford us financial flexibility and the opportunity to emerge in an even stronger competitive position. Michael B. Adler: Let me begin with a couple of key trends in the business. EDRs continue to soften in Q3 with our first quarter of negative growth in years. Forward-looking suggests even greater contraction in room rates in Q4. Room night growth also weakened significantly in September and into October, and at this time we don’t have great visibility into when this tide will turn. Our air business had a tough Q3. Given capacity reductions are only accelerating here in Q4, we expect airfares to increase placing incremental pressure on ticket volumes and revenue. We’ve mentioned this before but it’s the first time the industry has seen air ticket prices actually increasing in the face of an economic downturn, which combined with dramatically reduced lift in the key fly-to destinations such as Hawaii and Orlando makes for an especially challenging travel environment. As we indicated would be our approach, we adjusted marketing spend in Q3 to appropriately match the softening demand picture. As a result the direct portion of our selling and marketing expense grew just 4%, less than our revenue growth during the quarter with spending growth concentrated in our international markets. Total operating expenses grew just 8% leading to more than 100 bips of Q3 operating expense leverage. For the full year we expect operating expenses including selling and marketing will deleverage less than 100 bips against revenue in 2008. It’s important to note that we’re having to undertake more aggressive promotional activity in this environment to stimulate demand. Much of that activity, including lower prices, reduced fees and offers such as our gas card, is not included in our marketing expense line item. Turning to expectations clearly the global economy, the consumer and in turn the travel industry are in meaningfully worse shape today than 90 days ago. We’re seeing these trends significantly impacting the top line of the company. While year-to-date OIBA has grown 11%, we expect OIBA to decline year-on-year in Q4 and we’re likely going to see full-year OIBA growth in the low to mid-single digits, below our prior expectations. The reduction in expectations is due primarily to fx, and our current expectations assume exchange rates do not significantly move from recent levels. As it relates to fx, like any company with significant international operations, movements in exchange rates can have a meaningful impact on our financial results. While year-to-date our worldwide revenue growth has benefited more than 250 basis points from appreciating currencies, in September we saw almost no benefit. Here in October the dollar has continued to appreciate. As an example, as of this morning the British Pound is more than 20% below its average level from Q407. Given these recent dramatic currency shifts, absent a significant turnaround in rates, we will see a negative year-on-year impact from fx in Q4. As for 2009 we don’t want to talk about our specific expectations today but it’s clear that next year is shaping up to be a very difficult one in travel with lower airline capacity hurting unit volumes, continued ADR pressure making it harder for us to translate any volume growth into revenue growth, and overall growth rates likely not benefiting from fx as they have since mid-2006. As such we think that revenue growth, if any, will be hard to come by placing even more of a premium on managing expense and investment levels as we finalize our ’09 planning here in Q4. We now expect free cash flow will decline significantly in’08based primarily on the softer booking volume we have recently seen in the business and to a lesser extent due to improved supplier payment processing. Whether ’09 cash flow resumes growth will depend on our ability to grow OIBA as well as the relative growth rates of merchant hotels compared with our other working capital consuming businesses. We remain confident Expedia’s free cash flow over the long term will be substantial. With that we’ll turn to Q&A.

(Operator Instructions) Our first question comes from Imran Khan - J.P. Morgan. Imran Khan - J.P. Morgan: I was wondering if you could give us some color on what kind of trends you’re seeing outside the US and the UK market in international business? Secondly, can you discuss cost per click and the traffic conversion rate you are seeing? Michael B. Adler: The trends outside the US are pretty consistent in that I’d say the US and the UK are the weaker markets but we are seeing some de-acceleration in Europe in the continental market. So when you look at France, Germany, Italy, etc. there was a pretty consistent de-acceleration in the very healthy growth rates that we had seen called in Q1 and Q2 going into Q3. We haven’t seen signs of a bounce back yet. We’ll be watching that pretty carefully and then obviously fx is hurting us pretty significantly there. We also saw some de-acceleration in the Asia Pacific regions as well. To some extent what’s unusual as far as what we’ve seen now is almost every channel of ours as far as geographies slowing down and every channel slowing down as well, the various brands as well as our private label business, that are to some extent dependent on third party demand as well; those are slowing down as well. So it’s been a pretty broad slowdown. It’s something that we’re watching pretty carefully. The last couple of weeks have been a little more encouraging but it’s still a dog’s breakfast out there. It’s pretty tough. As far as cost per click and conversion, I’d say on the cost per click side we’ve been managing that pretty carefully and the increases that we saw at the beginning of the year have certainly moderated. We have managed some higher cost per click areas out, some of the meta sites for example we’ve pulled back from, etc. So the cost per click increase has moderated to some extent. I’d say conversion is mixed but encouraging. I’d say on the Expedia side it’s been pretty flat. Hotels.com and Hotwire have been up pretty strongly so we’ve done good work on conversion there and we’ll be very focused on conversion on the Expedia platforms going forward in Q4 and into next year.

Our next question comes from [Douglas Amooth] - Barclays Capital. [Douglas Amooth] - Barclays Capital: Mike, you commented on free cash flow and in particular payment processing for the merchant hotels picking up. Have you seen that pick up even more in the last 90 days or is it still on PAR with what you said at 2Q earnings? Secondly Dara, I think you commented earlier on Trip Advisor and the media and advertising business that you were also seeing some slowdown there. Can you provide some more color there in terms of traffic and also if you’re able to hold up what you were getting in terms of rates over the last few months? Michael B. Adler: On payment processing, I would say it’s about on PAR; perhaps modestly faster.

On Trip Advisor on the traffic front, traffic is still up and healthy overall. We have seen a slowdown in the traffic that we’re getting from Google in the US. So that’s been one area where traffic growth has been moderating so to speak and we’ll see what the trends look like further in Q4 and next year. On the sales side CPC rates I’d say in the past couple of weeks have come down modestly and we think that that’s not unexpected as far as a function of ADR trends that we’re seeing and some of the fx trends that we’re seeing. fx is starting to hurt Trip as well and especially next year since the European business is growing fastest, the fx rates are going to be a negative for us. So the traffic is growing but modulating and then CPCs are down slightly.

Our next question comes from Brian Fitzgerald - Banc of America Securities. Brian Fitzgerald - Banc of America Securities: A question on ADRs. You had a blended ADR decline of 1%. Can you break out what you’re seeing in terms of Europe versus the US maybe through October? And on a related basis, we’ve heard that hotels are taking steps to tighten capacity in order to maintain their ADRs. I think you guys mentioned that last quarter. Do you believe they can continue to do this throughout the downturn?

We don’t specifically break out ADRs as far as the US and Europe. Suffice it to say in Q3 Europe was up kind of I call middle single digits and the ADR declined, and the US actually saw a mid-single-digit decline in ADRs. So all that averaged to the decline of 1% across our portfolio. On a go-forward basis we see those ADR trends, at least within our system, getting worse. Now when you compare that to the overall industry if you think about the leisure volume, the leisure volume is the volume for our hotel operators. That’s the most variable. The pricing lever for hotels on the leisure side is the most variable because to some extent they have negotiated long-term rates with businesses, meetings incentives, etc. So when they see some occupancy weakness, and if you look at the Smith Travel Report, occupancy over the last couple of weeks has been down pretty significantly, the first lever that they’re going to pull is ADRs on the leisure side and obviously we’re a very big partner out there. We’re talking with them on a daily basis and trying to work with them in order to stimulate demand and keep occupancies up as much as possible. I would view us as a bit of a leading indicator as far as where ADRs are going and I do think that the trend that we’re seeing into Q4 is that our ADRs at least are going to be weaker in Q4 than what you saw in Q3. Michael B. Adler: On Europe ADRs I’d point out that going forward those are going to be impacted by the fx.

Yes. That’s actually the second hit for us; Europe.

Our next question comes from Mark Mahaney - Citigroup. Mark Mahaney - Citigroup: Three questions. The timing of the integration of Venere, when do you think that could have a material impact on your European business? Secondly, any trouble signs yet in terms of conflicts with having expanded the level of advertising on your core transaction sites? Anything there that through experimentation makes you more confident in your ability to put advertising on those sites? Finally, to what extent do you have to consider headcount reductions or workforce reductions over the next 12 months? Michael B. Adler: As far as the integration of Venere goes, what I’d first say is Venere itself as a point of sale isn’t going to be integrated. We’re going to run Venere as we do our other points of sale which is teams that are driving the look and feel of outside marketing, etc. The integration that we’re looking at is on the supply side and it’s looking at taking the Venere inventory and possibly making it available one way or the other on the Expedia and Hotels.com sites on a worldwide basis or definitely in Europe. The timing of that integration is not clear yet. We’ll have more to say on that on the next call but suffice it to say that through 2009 we expect to see something happening there and hopefully we’ll start seeing some of the Venere hotels on Expedia’s Hotels.com. The range is I’d say the middle of ’09 is probably a good date for you guys to target and hopefully we’ll see it. We expect a nice pickup as far as the volume going to those hotels. Again, we’ll have more to say in the next call. As far as the conflicts on the transactional side and the advertising and media business, we’ve been I’d say pretty cautious about how we move forward. We’re kind of measuring cannibalization all the time as we introduce advertising on the sites and from a measurement standpoint we really haven’t seen any kind of drop down in conversion, etc. as a result of our adding advertising to our sites. What we’re just careful about is the user experience. We don’t want users to not like flashing banners, etc. so we’re being pretty cautious as far as how we’re adding new advertising on, and to some extent we’re what I would say adding non-traditional advertising that really doesn’t hurt the user experience. For example, our Travel Ads product. It’s a sponsored listing. It looks like other listings out there. It doesn’t interrupt the user experience but it’s highly, highly targeted for the hotels and we’re seeing some good response there. So we see nice opportunity for advertising going into next year and the sort of advertising on our transactional sites is going to be a pretty significant growth driver going into 2009 at least based on the trends that we’re seeing now.

On the people side, the first area that we’re looking at and we think the biggest area of opportunity for us is in the non-people cost. It’s in the variable costs, etc. I think it’s really important for a company like ours right now to focus on execution on a lot of the projects that we’ve been investing in, the technology projects, etc. and bringing those through. I think we’re going to see where volumes come out. We are in an incredibly volatile time and based on where ’09 numbers are coming out, we’ll look at all costs including people costs as well. But we’re just not there yet.

Our next question comes from Justin Post - Merrill Lynch. Justin Post - Merrill Lynch: On the acquisition contribution, nice disclosure there. What are the drivers there? Is it mostly Venere or is there some other things in there?

That absolutely includes Venere this quarter for the first time but there are the other acquisitions that we have made throughout the year as well that are driving that. Michael B. Adler: I’d say Virtual Tourist is the other larger one and the other acquisitions are much smaller. Justin Post - Merrill Lynch: When did that close exactly? Can you remember the exact date? Michael B. Adler: Virtual Tourist was the end of Q2. Justin Post - Merrill Lynch: And Venere? Michael B. Adler: Early September. Justin Post - Merrill Lynch: Then on the hotel metrics, it looks like merchant hotel night volumes actually increased on a year-over-year basis. Could you describe what’s driving that? And then revenue per night, I think currency was still helping you within the quarter, is down 6%. Could you talk about the drivers of why t hat’s down year-over-year?

I’ll talk about the merchant hotel volume and Mike can talk about the revenue per room night. On the merchant hotel volume I think that it is a function of what I was talking about earlier which is really trying to drive conversion on our sites. I’d say we were pretty aggressively promotional during the quarter. You saw the gas card promotion out there, we were bringing down service fees to some extent to understand how that affected volumes, etc. and ADRs we were driving sale activity to 50% sale across the board which did result in volume uptick. I think that what we’re seeing in Q4 and we’ll see what happens next year is that the volume upticks that we saw in Q3 are softening based on especially what we talked about that week of the Lehman bankruptcy, etc. Obviously that’s something, the conversion getting our visitors coming to our site and converting is going to be a big, big focus going forward. Michael B. Adler: On revenue per room night, there are two main factors of the 6% decline. That is actually foreign exchange and service fees. On fx we really have substantially slower growth. We do have a small benefit for the quarter. You’re right when you say that but it was substantially less than last year at this time. So fx did absolutely impact the numbers in the quarter. Justin Post - Merrill Lynch: On the service fee side it may be down 8% year-over-year? Is that kind of the way to think about it, in that range? I think it was down 6% in the quarter so I was just trying to get my arms around it. Michael B. Adler: Revenue per room night is down 6%. Justin Post - Merrill Lynch: On Hotels.com we did see some deceleration. Are you still seeing really robust growth? Was that more on the US side or would you say it was just equal deceleration across the board versus last quarter? I think you gave us the Hotels.com number last quarter. Michael B. Adler: The de-acceleration has been pretty broad in that Europe is coming off of a much higher base so the European growth rates are higher but definitely we’ve seen de-acceleration in both Europe and the US on Hotels.com.

Our next question comes from Jennifer Watson - Goldman Sachs. Jennifer Watson - Goldman Sachs: Historically you’ve been very flexible with adjusting fees and running promotions on Hotels.com and Hotwire and even eliminating. Can you talk about how you see potentially doing that on the Expedia.com site either on a temporary basis or permanent basis in order to drive the transaction growth? Michael B. Adler: We’re going to test and learn Jennifer. We’re pretty aggressively going in. We are testing fees fairly consistently on all of our sites. With Expedia you saw that we actually took the air fees up to $7 per transaction which to some extent hurt our ticket volume but we think was pretty positive on a revenue standpoint. On Expedia we’re really testing the interrelation of do we want to go out with a gas card promotion specifically or in general do we want to drop fees for Expedia as well. We’re constantly testing and learning. I can’t tell you one way or the other the absolute direction that we think we’re going in in Q4 and 2009. The one area that we are going to be pretty focused on Expedia for 2009 is really on the attach rate between consumers who come in and buy air product and then trying to make sure that we can upsell them car, hotels or as I mentioned earlier insurance; any other product that we can attach to that consumer. We think there’s a big, big opportunity there. Our data mining capabilities, etc. are pretty significantly improved because we’ve built some good infrastructure there and really trying to increase the revenue per visitor, per user on Expedia is going to be a pretty significant focus on a go-forward basis, and we think a nice opportunity. Jennifer Watson - Goldman Sachs: I know you’ve talked a bit about transactions and the slowdown that you saw in mid-September but can you also discuss what you’re seeing in terms of consumers trading down? Michael B. Adler: We’re seeing that as far as the ADRs go on our various sites. The average ADRs that we’re seeing on a market-by-market basis have come down pretty significantly since Q2. That’s a combination of consumers trading down and the merchandising that we’re going forward with. We are going out there. We are securing better inventory from our hotel partners, and we’re coming out with a lot of sale activity, a lot of specials out there which do boost volume. The result might be consumers trading down but to some extent it’s because of our going out there and securing great deals for those consumers. Again it’s all about this theme of trying to drive conversion in a year where we think we’re going to be less aggressive on the marketing side let’s say than we were this year or last year.

Our next question comes from Vance Edelson - Morgan Stanley. Vance Edelson - Morgan Stanley: Could you elaborate on your ability to trim costs and streamline beyond headcount? It’s clearly a scalable model when the revenue growth is strong. Could you give us some examples of how you might be able to take actual costs out of the business or what areas you might be able to focus on there? Michael B. Adler: We are taking a hard look first at the variable costs of our business. Our call centers are largely outsourced and we have the ability to moderate the number of seats dedicated to our business up and down. We have a number of productivity initiatives targeted at reducing our credit card processing fees. We’ve seen good results over the last year or two and we do see [inaudible] in our fulfillment expenses and we will continue on that side as well. We feel like we have opportunities to become more efficient, more effective on our sales and marketing line which is the largest expense driver for the company. I think those are the first areas of primary focus.

To some extent some of these opportunities are there because of technology investments that we’ve made in the platform I’d say over the last 18 months. On the cost per call our taking that down to some extent is going to be a result of a new agent desktop that we’ve introduced that we’ve built over the past 18 months which because it makes it much easier for the agents to pull up information about the consumer, etc. we are already seeing it reducing the time per call for the agents and that’s something that’s going into next year. The reduction in merchant fees in Europe is the result to some extent of new merchant processing platforms that we built. These typically are not reductions that you can get out of looking at something with a two-month headway so to speak. These are technology investments that we put in place that we think are going to pay off in 2009, and I’ll say that the timing couldn’t be better so to speak. Michael B. Adler: As Dara indicated, this is not a result of what we’re seeing in the market place. This is part of our continued work on improving productivity and the effectiveness of our spend, and we will continue to be diligent in that regard. Vance Edelson - Morgan Stanley: I may have missed it, but given the strong balance sheet could you just remind us what your priorities are for the use of cash? Can you use periods of weakness like this to invest in IT for example or do other uses take preference right now? Michael B. Adler: I’d say our first priority is counting our cash on a daily basis and making sure it’s in our bank accounts. I’m joking but I’m half serious. I’d say right now with the kinds of changes that we’re seeing in the capital markets and consumer sentiment, etc. cash is very dear and we’re going to be to some extent kind of in a cash conservation mode and watching. We are going to be looking at our capital expenditures, etc. in ’09. We anticipate those coming down, hopefully significantly. While we will make investments, we are call it highly appreciative of the environment around us and just as our cost of capital as a company’s gone up, the cost of capital for internal projects have gone up as well. That said, once we do see some stability out there our long-term philosophy hasn’t changed. To the extent that we’ll allocate capital to the best resources out there, I think we’ve been quite effective on the mergers and acquisitions front. To the extent that we see some liquidity coming into the market, you can see us perhaps changing our tone and being a little bit more aggressive on the capital front.

Our next question comes from Michael Millman - Soleil-Millman Research Assoc. Michael Millman - Soleil-Millman Research Assoc.: Can you talk about how Expedia can use the weakness that you see coming forward to improve your competitive position? Most of your competition is much smaller. In connection to sort of following up on someone else’s question, you said you’ll have no booking fees on the off deal. Does that suggest that no booking fees might extend further? Second question. Can you talk a little bit about what you’re seeing in the rental car business, I think you’ve signed some agreements this year, whether you’re able to get enough inventory to operate Hotwire on car rental? Can you update us on where you stand on data mining? Michael B. Adler: As far as our taking advantage of the weakness, what you’ll see us do is really focus on call it from a consumer facing standpoint how do our products compare. If you look at some of the actions that we’ve taken over the past year, for example the introduction of the loyalty points out there; the thank you loyalty program that we have on Expedia, the 10-for-1 loyalty program welcome rewards that we have on Hotels, now [nectar] loyalty program that we have on Expedia in the UK; those are moves that we’ve made that have not been matched by our competition and to some extent those are moves that we can make because of the margins that we have per transaction and the overall financial strength of the company. They’re real investments that we’re making in developing very loyal consumers in an industry where loyalty has been difficult to some extent to pull off. So those are the kinds of actions. We believe that if you book on Expedia, you are more likely to get a better price than on our competition. You will get points. We are dropping fees on a selective basis. On Hotels.com there is no change cancel fee, etc. and we think that as long as we focus on the product and focus on what the product looks like to a consumer, we can make moves that our competition to some extent can’t. When you look at the AARP deal which I think that you were talking about that’s a very specific channel similar to the Hotwire channel as far as fees go. Just like we talked about on Hotwire we don’t have any air fees because we believe those consumers are much, much more sensitive to ticket pricing fees, etc. and we’ve maintained our stance of having no fees on Hotwire which has really helped out that business and helped us out overall. Same thing with AARP. We spoke with them; they’re a great partner to have; and we think that demographic to some extent is pretty focused on fees and we thought that going out with a no fees solution would be a win-win. I’d say so far so good. They’re a terrific partner to have and we’re very excited about bringing them on board. As far as your question on the rental car environment, I’d say that not much has changed since the last time that we talked. The rental car companies have been more call it judicious as far as controlling their fleets, etc. We are seeing some price weakness going into late Q3 going into Q4 so we do think that’s similar to the situation that you’re seeing with hotels. Our revenue per rental day so to speak is going to be down on a year-over-year basis which is going to be a headwind. Again we think that’s a good thing for our consumers and hopefully that can pick up the transactional trends but from a per transaction trend that’s what we’re seeing on the rental car environment. I think you asked about data mining as well. I point out two areas on data mining that we’re focused on. One is that if you look at the email campaigns that we have on Expedia in the US, a much higher percentage of the emails that go out in the US are targeted emails. Targeted emails convert at much, much higher rates; five, 10, some of them 30 times the rates that call it non-targeted emails go out. For example, one program that we have is if we know that you have searched for a flight from Los Angeles to New York and you haven’t bought and we see those prices go down by let’s say 10% or 15%, we’ll send you another email that says, “We saw you search for this flight. The price has changed. Do you want to buy?” That email converts at multiples of call it an email that’s not personalized 10 to 20 times non-personalized emails. We’re going to expand those programs into the European markets and hopefully we’ll see some good returns there. The other area that we’re focused on is getting much better at presenting the right hotel to the right consumer and getting much smarter about our hotel sort and building intelligence behind a sort, the kinds of hotels that we sort that are the right hotels, they’re high converting hotels, there are great deals out there that are well reviewed by our consumers and also give us the right margins. So we think that optimizing based on a number of factors hopefully can drive a conversion on a go-forward basis. This is kind of new data mining technology that we’ve built.

Our next question comes from Justin Post - Merrill Lynch. Justin Post - Merrill Lynch: Dara, if you look at your expense structure, it really looks like sales and marketing is by far and away your biggest expense. I made a kind of cautious comment on ’09 revenue growth. I’m just wondering from a big picture basis, anything you can do to really rationalize that line and are there some lower cost alternatives you really think you could roll out and be interesting as we look out through 2009?

I think that you’ve seen us rationalize our sales and marketing direct spend based on how the revenue trends have come in. It’s not a new exercise. It’s something that we’re focused on on a daily basis on every single point of sale that we have. When you break down our direct marketing costs, the search marketing for us on Google, the battle that we fought earlier in the year has been CPC inflation and really what we’re focused on is expanding the number of keywords that we’re bidding, mining the tail so to speak, something that for example Trip Advisor’s incredibly good at and really focusing on profitability on a keyword level which is something that certainly on a transactional site is in some sense harder to come by. But those are capabilities that we’re going to develop so that we actually drive efficiencies on the search engine marketing front. The biggest channel that we think can be a great offset to lower marketing efficiencies is the search engine optimization channel; it’s algorithmic search. Trip is very, very good at it. Hotels.com is getting much better at it especially in Europe. And as part of our building out our new platform by the end of the year we will have significantly improved site for SCO purposes and already as we’re rolling out parts of that technology we have seen some initial improvements in 2008 both in the US and Europe as far as SCO goes. So hopefully a big offset to and a big kind of free generator of traffic for us going into 2009 is going to be SCO which will allow us to offset call it either higher cost marketing channels or just add to the transactional base as we’re going into what could be a tough ’09.

I’d now like to turn the conference back to Mr. Hoss for any further remarks. [Stu Hoss]: Thank you for joining us on the call today and for your questions. A replay will be available on the IR website shortly after the completion of this call. We appreciate your interest in Expedia and look forward to convening with you again next quarter. Dara, did you want to make any closing remarks?

No. I think it’s a pretty tough environment but we’re confident that we’ve got all the tools to make our way through it and I’ll tell you the employee base here is energized and focused and knows that execution will be above all at this company it’s something that we’re very focused on. Thank you very much.

Ladies and Gentlemen, this concludes the Expedia, Inc. third quarter 2008 conference call. You may now disconnect. Thank you for using AT&T teleconferencing and have a pleasant day.