<SUBMISSION>
<ACCESSION-NUMBER>0000950123-09-009850
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20090528
<ITEMS>5.02
<ITEMS>8.01
<FILING-DATE>20090601
<DATE-OF-FILING-DATE-CHANGE>20090601
<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>09863620
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>333 108TH AVENUE NE
<CITY>BELLEVUE
<STATE>WA
<ZIP>98004
<PHONE>(425) 679-7200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>333 108TH AVENUE NE
<CITY>BELLEVUE
<STATE>WA
<ZIP>98004
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v52646e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
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<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




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


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 or 15(d) of the<BR>
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): May&nbsp;28, 2009</B></DIV>

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

<DIV align="center" style="font-size: 10pt"><B>(Exact Name of Registrant as Specified in Charter)</B></DIV>


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    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>000-51447</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>20-2705720</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>(State or Other Jurisdiction</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(Commission File Number)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(IRS Employer</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>of Incorporation)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Identification Number)</B></TD>
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<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD align="center" valign="top"><B>333 108th Avenue NE, Bellevue, Washington</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>98004</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>(Address of Principal Executive Offices)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(Zip Code)</B></TD>
</TR>
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</TABLE>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Registrant&#146;s telephone number, including area
code:</B> <B>(425)&nbsp;679-7200</B></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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>

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    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</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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<!-- link1 "Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers" -->
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May&nbsp;28, 2009, Expedia, Inc. (the &#147;<B><I>Company</I></B>&#148;) entered into an Employment Agreement with Dara
Khosrowshahi, the Company&#146;s Chief Executive Officer and President, and an Amended and Restated
Employment Agreement with Burke F. Norton, the Company&#146;s Executive Vice President and General
Counsel (together, the &#147;<B><I>Executive Employment Agreements</I></B>&#148;). Each of the Executive Employment
Agreements is effective as of May&nbsp;28, 2009 and has a term of three years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Compensation. </I>Mr.&nbsp;Khosrowshahi and Mr.&nbsp;Norton (the &#147;<B><I>Executives</I></B>&#148;) will each be entitled to receive
a base salary during the term of the Executive Employment Agreements. Mr.&nbsp;Khosrowshahi will
continue to receive his current $1,000,000 base salary. Mr.&nbsp;Norton&#146;s current base salary is
$375,000, which will increase to not less than $425,000 on January&nbsp;1, 2010. The Executives will
also continue to be entitled to receive annual discretionary bonuses and Mr.&nbsp;Norton&#146;s target bonus will be 75%
of his annual base salary.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Severance. </I>Upon a termination of an Executive&#146;s employment by the Company without Cause (other
than by reason of his death or Disability) or by an Executive for Good Reason, subject to the
Executive&#146;s execution and non-revocation of a release and compliance with the restrictive covenants
described below, then:
</DIV>


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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company will continue to pay his base salary through the longer of
(i)&nbsp;the completion of the term of the Executive Employment Agreement
and (ii)&nbsp;twelve months; provided that such payments will be offset by
any amount earned by the Executive from another employer during such
time period;</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="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in the case of Mr.&nbsp;Norton, the Company will consider in good faith the
payment of a discretionary bonus on a <I>pro rata </I>basis for the year in
which the termination of employment occurs;</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="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with the exception of restricted stock units granted pursuant to the
Restricted Stock Unit Agreement between Mr.&nbsp;Khosrowshahi and the
Company, dated March&nbsp;7, 2006, as amended, and contingent upon the
satisfaction of any applicable performance conditions, all equity held
by Mr.&nbsp;Khosrowshahi that otherwise would have vested during the
twelve-month period following termination of employment will
accelerate; provided that any equity awards that vest less frequently
than annually shall be treated as though such awards vested annually;</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="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>contingent upon the satisfaction of any applicable
performance conditions, all equity held by Mr.&nbsp;Norton that
otherwise would have vested during the twelve-month period following
termination of employment will accelerate; provided that any equity
awards that vest less frequently than annually shall be treated as
though such awards vested annually; and </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="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Executives will have eighteen months following such date of
termination to exercise any vested stock options granted by the
Company (including stock options accelerated pursuant to the terms of
the Executive Employment Agreement) or, if earlier, through the
scheduled expiration date of the options.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Restrictive Covenants. </I>The Executives will be restricted from competing with the Company and from
soliciting Company employees and business partners during the longer of the twenty-four month
period following the Executive&#146;s termination of employment for any reason and the term of the
applicable Executive Employment Agreement.</DIV>


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


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<!-- link1 "Item&nbsp;8.01 Other Events" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8.01 Other Events.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May 29, 2009, Expedia, Inc., a Washington corporation and wholly owned
subsidiary of the Company, received an order from the King County Superior
Court in the In re Expedia Hotel Taxes and Fees Litigation, No. 05-2-02060-1
lawsuit, granting the plaintiffs&#146; motion for summary judgment on their breach of
contract claim, without the benefit of an actual trial on the merits. The court&#146;s
order on the plaintiffs&#146; breach of contract claim is not a final judgment and will not
become a final judgment until (a) completion of a trial on the remaining claims or
(b) the court revises its order and enters a final judgment on the breach of
contract claim. Upon final judgment, in order to appeal, we would be required to
post a bond or alternative security for the amount of the judgment or some lesser
amount agreed upon by the parties or ordered by the court.

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The plaintiffs&#146; breach of contract claim was based on Expedia.com&#146;s Terms of
Use that were in effect from February 2003 through December 2006. The court
concluded that the damages for the alleged breach are $184,470,451. We
believe that the court&#146;s decision is wrong on the law and wrong on the facts.
Expedia.com charged its customers a service fee for certain transactions during
the period described above, which was fully disclosed to each customer before a
booking was completed, and we are confident that we have fulfilled all applicable
obligations to our customers. Because we believe that the court&#146;s decision is
inconsistent with both the facts and the law, we will vigorously pursue our rights
on appeal.</DIV>

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<!-- link1 "SIGNATURE" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURE</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 has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>

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    <TD width="48%">&nbsp;</TD>
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    <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">Date: June 1, 2009.&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Burke F. Norton
&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">Burke F. Norton&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">Executive Vice President, General Counsel and Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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