Expedia revamps leadership before vote on IAC spinoff

Less than a week before shareholders are scheduled to vote on the spinoff of Expedia from its corporate parent, the Bellevue online travel company has restructured its management team.

The changes come as Expedia Inc. prepares to break from IAC/Interactive Corp., a move that is expected to create the second-largest publicly traded Internet company in the Seattle area behind Amazon.com.

New executives include Mark Gunning, AT&T Wireless' former senior vice president of finance, who will be chief financial officer, and former Cisco Systems executive Paul Onnen, who will fill the role of vice president of technology.

Gunning, who was instrumental in the $41 billion sale of AT&T Wireless to Cingular last year, previously was chief financial officer at Nextlink Communications and AirTouch Communications. He replaces Chris Bellairs.

Onnen, who previously held senior technology positions at WebMD and Nordstrom.com, fills a position vacated by David Beitel.

The online travel company also promoted three executives. Former Expedia.com President Steven McArthur will now oversee Expedia's North American Leisure Travel Group -- consisting of Expedia.com, Hotels.com, Hotwire.com, Classic Custom Vacations and TripAdvisor.

Former Hotels.com President Cheryl Rosner will head Expedia's Corporate Travel Group, a position previously held by Matt Hulett, who is leaving the company.

And Paul Brown, a former Hotels.com executive, will be responsible for a new division within Expedia called Partner Services Group. That group, consisting of about 500 employees, will handle negotiations with hotels, airlines and other service providers on behalf of the Expedia businesses.

Brown, who will report directly to Expedia Chief Executive Dara Khosrowshahi, is a former partner with McKinsey & Company.

No other executive appointments are expected, said Expedia spokesman Jason Reindorp.

IAC/Interactive Corp. shareholders are scheduled to vote on the spinoff of Expedia Tuesday at company's annual meeting in New York. If shareholders approve the move, Expedia could begin trading on the Nasdaq exchange 12 to 24 hours after IAC's second-quarter earnings announcement on Aug. 2 or Aug. 3. Expedia, which was spun out of Microsoft in 1999 and bought by IAC/InterActive in 2003, has requested the ticker symbol "EXPE."

Expedia will employ about 4,300 people after the spinoff, with 1,200 in the Seattle area. The online travel businesses that make up Expedia produced revenue of $485 million in the first three months of the year, with operating income of $108 million.

IAC/InterActive, which is led by media mogul Barry Diller, is spinning off Expedia to create a tightly focused online travel company that can more nimbly embrace opportunities. Splitting the two companies also will provide more clarity to investors, the company said.

"The reason for the spinoff is to let the other parts of IAC shine and bring a sense of normalcy back to the balance sheet," said Reindorp. "It also lets the travel companies regain the normal pace that they would grow at, so it frees us up from having to hold back a little bit."

Diller, who has expanded IAC's reach lately with the $1.9 billion offer for search engine Ask Jeeves, will be chairman of Expedia once the spinoff is complete.

P-I reporter John Cook can be reached at 206-448-8075 or johncook@seattlepi.com.

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