<SUBMISSION>
<ACCESSION-NUMBER>0000891020-06-000301
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20061025
<ITEMS>1.01
<FILING-DATE>20061031
<DATE-OF-FILING-DATE-CHANGE>20061031
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>Expedia, Inc.
<CIK>0001324424
<ASSIGNED-SIC>4700
<IRS-NUMBER>202705720
<FISCAL-YEAR-END>1205
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-51447
<FILM-NUMBER>061176473
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>3150 139TH AVENUE SE
<CITY>BELLEVUE
<STATE>WA
<ZIP>98005
<PHONE>(425)679-7200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>3150 139TH AVENUE SE
<CITY>BELLEVUE
<STATE>WA
<ZIP>98005
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v24617e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>Form&nbsp;8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): October&nbsp;25, 2006</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Expedia, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="30%">&nbsp;</TD>
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    <TD width="30%">&nbsp;</TD>
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<TR valign="bottom">
    <TD align="center" valign="top">Delaware
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">000-51447
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">20-2705720</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>
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</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
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    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD nowrap align="center" valign="top">3150 139<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Avenue S.E., Bellevue, Washington
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">98005</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
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</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code: (425)&nbsp;679-7200</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
</DIV>


<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)<BR></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1.01. Entry into a Material Definitive Agreement.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Adler Employment Agreement; Adler RSU Agreement</U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
October&nbsp;31, 2006, Expedia, Inc. (the &#147;Company&#148;) entered into an employment agreement (the
&#147;Adler Employment Agreement&#148;) and a Restricted Stock Unit Agreement (the &#147;Adler RSU Agreement&#148;)
with Michael B. Adler, the Company&#146;s Executive Vice President and Chief Financial Officer. The
Company previously reported the appointment of Mr.&nbsp;Adler in its Current Report on Form 8-K, dated
April&nbsp;6, 2006. The April&nbsp;6, 2006 Current Report on Form 8-K disclosed material terms of the
employment arrangements between Mr.&nbsp;Adler and the Company, including the award of the restricted
stock units further described below. The Company memorialized these arrangements and additional
matters in the Adler Employment Agreement and the Adler RSU Agreement. The Adler Employment
Agreement is effective as of May&nbsp;16, 2006 for a term of three years. A summary of key terms of the
Adler Employment Agreement and the Adler RSU Agreement follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Adler Employment Agreement: </I>During the term, Mr.&nbsp;Adler will receive an annual base salary of
$375,000 and will be eligible to receive a discretionary annual bonus. In addition, Mr.&nbsp;Adler
received a signing bonus of $250,000, which is subject to forfeiture if the Company terminates Mr.
Adler&#146;s employment for Cause or Mr.&nbsp;Adler terminates his employment without Good Reason prior to
May&nbsp;16, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event Mr.&nbsp;Adler terminates his employment with the Company for Good Reason or the
Company terminates Mr.&nbsp;Adler&#146;s employment with the Company without Cause, Mr.&nbsp;Adler is entitled to
receive his base salary through the longer of (1)&nbsp;the completion of the term of the Adler
Employment Agreement and (2)&nbsp;twelve months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Adler will be restricted from competing with the Company or soliciting/hiring Company
employees during the twenty-four month period following the termination of his employment with the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Adler RSU Agreement</I>: Mr.&nbsp;Adler was granted 84,832 restricted stock units (the &#147;First RSU
Award&#148;) and 53,020 restricted stock units (the &#147;Second RSU Award,&#148; and together, the &#147;Awards&#148;)
pursuant to the Expedia, Inc. 2005 Stock and Annual Incentive Plan (the &#147;Plan&#148;). Material vesting
terms are as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Both Awards vest in equal increments over five years, contingent upon satisfaction
of performance goals (&#147;Performance Goals&#148;) established by the Compensation Committee
of the Company&#146;s Board of Directors.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Contingent upon satisfaction of applicable Performance Goals, 50% of the First
Award and that portion of the Second Award that would have vested during the twelve
months following termination will vest upon a Company termination of employment
without Cause or an employee termination of employment for Good Reason.</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Both Awards vest upon a Change in Control of the Company as defined in the Adler
RSU Agreement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Norton Employment Agreement; Norton RSU Agreements</U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;25, 2006, Burke F. Norton was appointed Executive Vice President, General Counsel
and Secretary of the Company. The Company entered into a three year employment agreement (the
&#147;Norton Employment Agreement&#148;) and two Restricted Stock Unit Agreements (the &#147;Norton RSU
Agreements&#148;) with Mr.&nbsp;Norton. A summary of key terms of the Norton Employment Agreement and the
Norton RSU Agreements follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Norton Employment Agreement</I>: Mr.&nbsp;Norton will receive an annual base salary of $375,000 and
will be eligible to receive a discretionary annual bonus. He will also receive a signing bonus of
$250,000, which is subject to forfeiture if the Company terminates Mr.&nbsp;Norton&#146;s employment for
Cause or Mr.&nbsp;Norton terminates his employment without Good Reason prior to October&nbsp;25, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event Mr.&nbsp;Norton terminates his employment with the Company for Good Reason or the
Company terminates Mr.&nbsp;Norton&#146;s employment without Cause, Mr.&nbsp;Norton is entitled to receive his
base salary through the longer of (1)&nbsp;the completion of the term of the Norton Employment Agreement
and (2)&nbsp;twelve months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Norton will be restricted from competing with the Company or soliciting/hiring Company
employees during the twenty-four month period following the
termination of his employment with the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Norton RSU Agreements</I>: Mr.&nbsp;Norton was granted 62,235 restricted stock units (&#147;Tranche Vesting
RSUs&#148;) and 31,117 restricted stock units (&#147;Cliff Vesting RSUs,&#148; and together, the &#147;Awards&#148;)
pursuant to the Plan. Material vesting terms are as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Tranche Vesting RSUs vest in equal increments over four years, contingent upon
satisfaction of applicable Performance Goals.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Cliff Vesting RSUs vest in full after five years, contingent upon satisfaction
of applicable Performance Goals.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Contingent upon satisfaction of applicable Performance Goals, upon a Company
termination of employment without Cause or an employee termination of employment for
Good Reason, (1)&nbsp;the Tranche Vesting RSUs that would have vested during the twelve
months following termination and (2)&nbsp;a <I>pro rata </I>portion of the Cliff Vesting RSUs
will immediately vest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pursuant to the terms of the Plan, both Awards vest upon a
Change in Control of the Company as defined in the Plan.
In addition, pursuant to the terms of the Norton RSU Agreements both Awards vest if the Company terminates Mr.&nbsp;Norton&#146;s employment
without Cause or Mr.&nbsp;Norton terminates his employment with the Company for Good Reason
following a Change in Control of the Company as Change in Control is defined in the Norton RSU Agreements.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise specified, capitalized terms used above without definition have the meanings
set forth in the applicable agreement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date: October&nbsp;31, 2006
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">EXPEDIA, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/  Dara Khosrowshahi
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Dara Khosrowshahi&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">President and CEO&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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