Microsoft delays Expedia sale

Microsoft Corp.'s planned sale of Internet travel retailer Expedia Inc. has been delayed after the buyer, USA Networks Inc., entered negotiations to sell off some of its assets to entertainment giant Vivendi Universal SA.

Microsoft announced in July that it would sell its 75 percent stake in Expedia to USA Networks. The deal was expected to close by Dec. 31, but that has now been pushed back to the March or June quarters, the software maker said Tuesday.

The sale of the travel retailer, launched in 1996 by Microsoft, was expected to produce a US$650 million pretax gain. Microsoft planned to account for the gain as investment income in its fiscal second quarter ending Dec. 31.

For the past two fiscal quarters, Microsoft has reported major loses from investments. Losses in the first quarter totaled about $980 million, mainly due to sour investments in cable and telecommunication companies, Microsoft said.

The company said at the time that it would report more losses from those investments when it releases second quarter earnings during the week of Jan. 14. The $650 million gain from the Expedia sale would have helped offset those losses.

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