TIME Companies

The 5 Craziest Numbers From Apple’s Earnings Report

Apple Introduces Two New iPhone Models At Product Launch
Apple CEO Tim Cook speaks during an Apple product announcement at the Apple campus on September 10, 2013 in Cupertino, California. Justin Sullivan—Getty Images

Apple had a record-setting quarter in more ways than one

Apple posted record earnings Tuesday afternoon, sending its stock skyrocketing more than 9% in after-hours trading. Here’s a quick look at the five craziest figures from Apple’s first quarter earnings report:

1. Apple made $18.04 billion in profit and $74.6 billion in revenue for the quarter. Those are both records for Apple alone, but there’s more: The numbers mean Apple just had the most profitable quarter of any company ever, beating out Russia’s Gazprom by a neat $1.8 billion.

2. Apple sold a record 74.5 million iPhones last quarter. Company CEO Tim Cook said on average, Apple sold 34,000 iPhones every hour, 24 hours a day, each day over the three-month quarter. That’s just over 9 iPhones sold every second.

3. Apple has shipped 1 billion iOS devices to date, including iPhones and iPads. Cook told investors on a conference call the billionth device was a 64GB iPhone 6 Plus, which the company is keeping at its Cupertino headquarters as a trophy.

4. Apple’s new iPhone 6 and iPhone 6 plus lineup convinced the highest-ever number of Android users to switch to the iPhone, Cook said, though he didn’t give precise figures.

5. Apple made $16.1 billion in revenue from “greater China,” a category that includes mainland China as well as Hong Kong and Taiwan. That’s up 70% year-over-year and a big reason why the company had a record-setting quarter overall.

(Read more: Apple shines with record earnings on huge iPhone sales)

 

TIME Companies

GoDaddy Pulls Controversial Puppy Commercial From Super Bowl

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fotostorm—Getty Images

The commercial caused outrage on social media, with many raising concerns about animal cruelty

Website-building service GoDaddy decided to pull its upcoming Super Bowl commercial and delete it from YouTube after people accused the firm of condoning the sale of puppies online.

The company issued a statement assuring the public that it had heeded their calls to nix the controversial ad, USA Today reported.

The ad, which featured a puppy finding its way home, resulted in several Twitter and Facebook users, as well as organizations like the SPCA, raising concerns about animal cruelty. The clip shows the puppy being sold on a website built using GoDaddy.

“The responses were emotional and direct. Many people urged us not to run the ad,” the company said. “The net result? We are pulling the ad from the Super Bowl.”

[USA Today]

TIME Companies

Here’s the Good News in Microsoft’s Spotty Earnings Report

Microsoft PRO 3 Surface Tablet Launch
Microsoft Pro 3 Surface Tablet at Skylight Clarkson Sq on May 20, 2014 in New York City. Steve Sands—Getty Images

Sales of Microsoft's mobile hardware are up, a bit of good news buried in a glum earnings report

A glimmer of good news was buried in Microsoft’s otherwise glum earnings report Monday: Sales of its mobile devices are on the rise.

Microsoft’s Surface tablets, initially a commercial flop, are now raking in $1 billion a quarter, with sales up 24% year-over-year. Lumia smartphone shipments surged by 28%, hitting a record-breaking 10.5 million units.

Does that mean Microsoft is poised to take the mobile device market by storm? Let’s not get ahead of ourselves. Microsoft’s Windows Phone devices still make up only about 3% of the mobile phone market, nothing to text home about. Meanwhile, those Surface sales sound impressive on their own, but not so much when they’re stacked up against the $9 billion the iPad made last quarter — and that’s a weak showing for the Apple tablet.

Microsoft’s biggest challenge in mobile devices — phones in particular — is a lack of compatible apps. Developers look at Windows Phone’s low adoption rates and decide against writing apps for the system, then users avoid it because of the lack of apps — which in turn means lower adoption and, again, even less developer interest. Windows phones have 560,000 apps and counting, roughly half as many available to Apple and Android users. Want to download the official Starbucks app, for instance? Don’t get a Windows Phone.

Ultimately, consumers care less about their mobile hardware than what they can do with it. “It may sound trivial,” says Merv Adrian, vice president of research at Gartner, “but in the consumer space it is trivial things that make all of the difference.”

Microsoft hopes to break this vicious cycle with the release of Windows 10, which CEO Satya Nadella says is “most attractive Windows platform for developers ever.” The secret sauce? A unified code that will make it easier for developers to create nearly identical apps for PCs, tablets and phones, which should help increase the pool of available apps and drive up consumer interest.

“You don’t write the same code for a six-inch screen as you do for a giant monitor,” says Gartner’s Adrian, “but much of what goes on underneath that level about how [developers] work with the hardware, that stuff is the same.” That means a developer targeting Windows PC users could be one metaphorical turn of the screw away from creating an app for people using Microsoft’s mobile hardware, too.

Whether Microsoft is successful depends on how developers respond to its upcoming Windows 10 operating system, due out later this year. That could be a long and arduous process, says Adrian: “The good news is that the refresh cycle for the tech is pretty short. People don’t wait for five years to buy a new phone.” As long as Microsoft’s Surface tablets and Lumia phones keep a toehold in the market, then, they could have a shot at success under a more unified Windows platform in the months ahead.

TIME Companies

There Are America’s Best Run Companies

Southwest Airlines jets parked at Baltimore Washington International Airport in Baltimore, Md.
Southwest Airlines jets parked at Baltimore Washington International Airport in Baltimore, Maryland. Charles Dharapak—AP

The list was compiled based on three key measures in the past year: earnings per share, revenue and share price

This post is in partnership with 24/7 Wall Street. The article below was originally published on 247WallSt.com.

The stocks of many public companies have soared in the past year, even with a larger number of them posting only mediocre financial results. The overall market improvement has been that strong. However, some companies were able to shine above the rest, both in terms of stock prices and financial results, which puts them into a very exclusive category.

24/7 Wall St. picked eight companies as the best run in America because they had extraordinary numbers based on three key measures in the past year: earnings per share, revenue and share price. To be considered for the list, companies ultimately also had to convince investors that they had very bright futures. The eight companies highlighted here have track records of seizing opportunities, excelling in their industries and outperforming the expectations set by investors.

While the U.S. stock market has enjoyed a rally in the past five years, the best run companies reviewed by 24/7 Wall St. greatly exceeded the S&P 500’s 86.4% increase. Under Armour Inc. is the most notable example as its shares soared more than 900% over the period. The share prices of O’Reilly Automotive Inc. and Southwest Airlines Co. have had share price results nearly as good during the past five years, up 410% and 290%, respectively.

Some of the best-managed companies have capitalized on key opportunities and are now reaping the benefits. For example, Lam Research Corp. positioned itself as a leader in producing machinery for semiconductor manufacturers, especially memory chip makers, at a time when such manufacturers have been ramping up capital spending. Another example is O’Reilly, which has expanded its store footprint and retail infrastructure to efficiently meet the growing demand of the do-it-yourself car repair market, as well as the commercial auto repair one.

In other instances, companies have calmed investors’ concerns and beat their expectations. Facebook Inc. is one of the strongest examples of this. The social network has defied skepticism about its ability to make money on mobile ad sales, and such sales now account for about 66% of its revenue.

A few companies have succeeded by offering best-in-class products and services. Marriott International Inc. is extremely popular with franchisees looking to operate a hotel, a key advantage in its industry.

Edwards Lifesciences Corp. rolled out in the United States its Sapien XT transcatheter aortic valve replacement, which is used in patients who cannot undergo open-heart surgery. Sapien XT outperformed a similar product produced by competitor Medtronic, according to a study published in the Journal of the American Medical Association.

Many of these companies still have significant challenges ahead. In some cases, they must justify their very high valuations. Facebook trades at more than 41 times expected 2015 earnings and Under Armour at nearly 56 times forward earnings. Edwards must clear Food and Drug Administration hurdles to bring its next product, Sapien 3, to market in time to satisfy Wall Street. And Southwest Airlines and Marriott remain especially sensitive to unexpected changes in the U.S. economy, which affect how often people travel.

In order to determine America’s best run companies, 24/7 Wall St. reviewed all S&P 500 stocks that rose in the past year. We then screened for companies where the trailing 12-month revenue and diluted earnings per share had grown from the year before. 24/7 Wall St. editors then reviewed this list to find those companies that had capitalized on major opportunities to expand, that made operational choices that could drive their future performance over a multiyear period or that have proven themselves as clear market leaders. Figures on revenue and diluted EPS, as well as industry classifications, are from S&P Capital IQ. One-year share price data, also from CapIQ, is as of December 22, 2014. Marriott International’s revenues include cost reimbursements.

These are America’s best run companies.

1. Southwest Airlines Co.
> Industry: Airlines
> Revenue (last 12 months): $18.4 billion
> 1-year share price change: 118.8%

Southwest Airlines had an incredibly strong year in 2014. The airline reaped the benefits of a commitment to domestic flights and of a revenue strategy that did not depend on baggage fees. Although it is a now-common industry practice, Southwest believed baggage fees would undermine its ability to appeal to consumers. Also, Southwest was able to add major routes from its home airport, Dallas Love Field, after the repeal of the Wright Amendment, which limited flights from its hub to just nine states.

Some of Southwest’s strong performances can be attributed to overall positive industry trends: fuel costs have declined; the U.S. economy has improved; industry consolidation has allowed airlines to pack planes more efficiently; and passengers flew more last year than they did in 2013. Moreover, Southwest has outperformed where it matters most — profitability. On a trailing 12 month basis, the airline’s operating margins were better than those of the three national legacy carriers: American Airlines, United Continental, and Delta Air Lines.

2. Edwards Lifesciences
> Industry: Healthcare equipment
> Revenue (last 12 months): $2.2 billion
> 1-year share price change: 103.2%

For heart valve maker Edwards Lifesciences, 2014 was a banner year, as its share price more-than doubled. The company received approval from the Food and Drug Administration in June to release its newest device, Sapien XT, a transcatheter aortic valve replacement (TAVR) device. For many high-risk patients, the less invasive TAVR procedure is more suitable than open heart surgery. In the first nine months of 2014, Edwards’ sales of transcatheter heart valves rose by 29%, driven by the launch of the Sapien XT in the U.S. and Japan, as well as by the release of the newer Sapien 3 in Europe.

According to J.P. Morgan, “Over the last half dozen years, Edwards has led the development of the transcatheter valve market – first in Europe, then the US, and now in Japan.” A recent study published in The Journal of the American Medical Association found that the Sapien XT was more likely to be successfully implanted compared to a rival product from Medtronic.

3. Marriott International
> Industry: Hotels, resorts, and cruise lines
> Revenue (last 12 months): $13.5 billion
> 1-year share price change: 62.9%

Marriott International shares rose substantially in 2014 on the back of an extremely strong year for the company. In the third quarter of 2014, Marriott’s occupancy rate and average daily rate per room were both well above the prior year’s figures. This led to a 9.4% year-over-year increase in revenue per available room (RevPAR), extending a multi-year growth trend following a massive decline in RevPAR during the Great Recession. Higher revenues have also driven up profits. Through September, diluted earnings per share were up more than 23% in 2014 from the year before.

According to a recent report from Barclay’s, Marriott is among the leading hotel chains in adding new units. Barclay’s also noted that both franchisees and lenders prefer Marriott to most other hotel franchisors. The majority of hotels operating under one of Marriott’s brands are franchised.

For the rest of the list, please go to 24/7WallStreet.com.

TIME Companies

Why Microsoft Is Making Less Money From Windows

Microsoft Unveils Windows 8
People walk past a display at a press conference unveiling the Microsoft Windows 8 operating system on October 25, 2012 in New York City. Mario Tama—Getty Images

Sluggish PC sales are partially to blame, but there's more to this story

Microsoft’s second quarter earnings report released Monday had a few bright spots, including rising sales in mobile devices and cloud services. Overall, the company’s sales were up 8% in the quarter ending Dec. 31, though costs related to acquisitions and layoffs meant profits were down 10.6% to $5.9 billion.

Despite the company’s good sales numbers, revenue from copies of its Windows operating system installed on new computers, long a reliable source of cash, were down 13% year-over-year. Why?

First, the consumer PC market has been either slipping or stagnant for years, meaning there’s fewer devices capable of running Microsoft’s PC operating system being sold.

But there’s another reason that’s far more under Microsoft’s control.

Back at the end of 2013, Microsoft was on the verge of ending technical support for Windows XP business customers. That convinced lots of IT and accounting departments it was finally time to upgrade from the decade-plus-old operating system, driving sales of Microsoft’s newer OSes, like Windows 8.

However, that XP end-of-life phenomenon wasn’t around to drive sales last year, helping explain Windows’ poor year-over-year numbers. (Microsoft also said cheaper copies of Windows it sold to academic buyers cut into the category’s revenue).

It’s safe to expect Windows to be less of a moneymaker for Microsoft in the future. Last week, the company announced that its upcoming iteration of the operating system, Windows 10, will be a free upgrade for users with older versions already installed. That’s a consumer-friendly move that should help drive adoption rates, but it will eat even further into Windows’ revenue figures. Still, if Microsoft continues to be successful in mobile and cloud services, that could more than make up for the free upgrade.

(Read next: Microsoft’s profits dip despite strong phone sales)

TIME Companies

Microsoft’s Profits Dip Despite Strong Phone Sales

Microsoft Holds Annual Shareholder Meeting
Microsoft CEO Satya Nadella addresses shareholders during Microsoft Shareholders Meeting December 3, 2014 in Bellevue, Washington. Stephen Brashear—Getty Images

Sales of Surface tablets are gaining steam, even if they still trail far behind Apple’s iPad

Microsoft said Monday its profits fell more than 10% during its latest quarter despite an uptick in sales. Here are the key points from the tech giant’s latest earnings.

What you need to know: Microsoft’s sales jumped nearly 8% in the quarter ending Dec. 31, improving to $26.5 billion. That is in line with the $26.3 billion in revenue that analysts expected, according to Thomson Reuters. But the company’s profits fell by 10.6% to $5.9 billion, or 71 cents per share.

Contributing to the decline in earnings was a $243 million charge the company took from “integration and restructuring expenses” related to the massive layoffs Microsoft announced last summer as well as ongoing costs from integrating the mobile phone business it acquired from Nokia in early 2014.

Microsoft shares dropped by 2.5% in after-hours trading following the release of the company’s financials.

The big number: CEO Satya Nadella has put a lot of focus on cloud computing since taking control of the company last year. Now, the company has said that commercial cloud sales more than doubled again in the latest quarter, the third under Nadella’s watch as CEO. That’s after cloud sales jumped 128% in the previous quarter.

A 30% gain in non-corporate Office 365 subscribers last quarter helped drive the increased cloud revenue, which Microsoft said extrapolates to $5.5 billion annually based on last quarter’s returns. “Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership,” Nadella said in a statement.

Microsoft’s overall revenue also received a major boost from its phone hardware sales, which added $2.3 billion to the quarterly tally by selling a record 10.5 million Lumina smartphones. Still, Windows Phones lost some of their share of the U.S. smartphone market in 2014, dropping to 3.1% from 3.3% the previous year, according to data from eMarketer.

What you might have missed: Sales of the company’s Surface tablets continue to gain steam, even if they still lag far behind iPad sales. Microsoft said its Surface revenue crossed the $1 billion mark for the first time, rising 24% year-over-year to $1.1 billion last quarter. By comparison, Apple reported $5.3 billion in iPad sales in its most recent quarter.

Meanwhile, Microsoft said its search advertising revenue jumped by 23% last quarter, helped by a slight increase in the company’s share of the U.S. search market. Microsoft’s Bing grabbed a 19.7% U.S. market share last year, which was up slightly and outpaced Yahoo’s 10.2%, according to comScore.

Microsoft also received a boost from a strong holiday retail season for its Xbox One gaming console, which sold 6.6 million units in the quarter. The company said last week that the Xbox One was the bestselling console in the U.S.in November and December after Microsoft slashed the price of the popular console, from $499 when it was first released in 2013, to $349 at the end of October. Still, overall sales for the company’s computing and gaming hardware segment dropped more than 10%, to $3.9 billion, in the second quarter.

This article originally appeared on Fortune.com

TIME Fast Food

McDonald’s CEO Pleads for Time to Turn Things Around

A sign stands outside of a McDonald's restaurant in San Francisco.
A sign stands outside of a McDonald's restaurant in San Francisco. Justin Sullivan—Getty Images

Many changes are to come for the fast food giant

The only good thing about 2014 for McDonald’s is that it’s finally over.

As Fortune detailed in November, this has been a terrible, horrible, no good, very bad year for the iconic fast food giant. Today the company capped it off by reporting fourth-quarter and full-year results that made 2014 the first year since 2002 in which it reported a decline in global same-store sales.

The year was historically bad for McDonald’s U.S. business in particular. Nation’s Restaurant News reported last week that the company’s slump in the U.S. market would be the first time its numbers waned compared to the year before in at least 30 years, ending the longest run ever of domestic restaurant sales growth for a single chain.

On the earnings call today CEO Don Thompson cited a litany of actions the company is taking to turn things around, including localizing its menu, allowing patrons to customize their burgers, and launching fresh marketing. He stressed that McDonald’s is “acting with a sense of urgency”—but he also made the case for giving management more time for a turnaround to kick in. He noted that McDonald’s is only six months into the 12- to 18-month plan he outlined in July.

“History tells us that these efforts will take time to resonate,” Thompson said on the call, “[and therefore] expect continued volatility in the market through most of 2015.” As he put it, “2015 will be a year of regaining momentum globally…. It will take time, especially in larger markets to notice the comprehensive changes that are under way.” He warned that the company would continue to feel pressure on sales and earnings in the first half of the year, with negative same store sales already expected for January.

Thompson certainly inherited some of the company’s issues, such as menu bloat, which had been a long time in the making when he became CEO in July 2012. Thompson had to report a slowdown in sales growth in most major markets his very first quarter on the job, but he’s now had two and a half years to change the company’s trajectory and the arrows keep pointing the wrong direction.

One promising sign, perhaps, came from a subtle shift in what McDonald’s said about food quality—a sensitive issue for the company. McDonald’s management has always maintained that its food is excellent, arguing that it was a simply a perception problem; the company, it said, just needed to do a better job educating consumers about its ingredients and how they’re prepared. But this time Mike Andres, president of the U.S. business, acknowledged on the call that “we have to make sure our quality aligns with consumers’ definition of quality moving forward. And so we’re going to be very agressive in that area.” He said that he’s building culinary talent and bringing in outside consultants to help with “menu vision.”

It was an important acknowledgement. But the company’s challenge remains daunting. It needs to simultaneously pare its menu, improve its offerings, increase its speed, and hone its message—a combination of factors that will be hard to pull off, particularly in a world where many customers are craving healthier offerings.

This article originally appeared on Fortune.com.

TIME Companies

Here’s Everything You Need to Know About Box

Box, Inc. Chairman, CEO & co-founder Aaron Levie, second from right, gets a high-five during opening bell ceremonies to mark the company's IPO at the New York Stock Exchange on Jan. 23, 2015.
Box, Inc. Chairman, CEO & co-founder Aaron Levie, second from right, gets a high-five during opening bell ceremonies to mark the company's IPO at the New York Stock Exchange on Jan. 23, 2015. Richard Drew—AP

The cloud storage company went public Friday

The cloud: it’s a buzzy form of computing technology as nebulous as the climatic phenomenon for which it’s named. The largest technology companies, from Google to Amazon to Microsoft, are investing in cloud-based storage services for customers. All of us dabble in the cloud every day when we log into Facebook or stream a movie on Netflix, but a lot of us don’t know exactly how it’s used.

No, this isn’t an explainer about the cloud. But it is an introduction to a hot company that’s using the cloud — and could be Wall Street’s next Silicon Valley darling.

The company is Box, and Friday is its first day of public trading. Offering individuals and businesses easy-to-use cloud-based storage and other enterprise solutions, the $1.7-billion company has caught plenty of investors’ attention.

Here’s why so many people care about Box:

What is Box?

Box is a cloud storage company. What that means is that you can upload files—documents, videos, photos, etc.—to the service from your phone, tablet or computer. Then you can access those files anywhere. Think of it as a floating hard drive that’s connected to all your devices. You can store up to 10GB on it for free, and up to 100GB for a $10 per-month fee.

Who is using Box?

Mostly businesses. About 99% of its 32-million users are employees from Fortune 500 companies. It’s aiming a lot of its services toward particular industries, including health care and retail, by creating purpose-built sharing tools.

Last year, Box acquired MedXT to let customers in medicine annotate medical images, and the company has been attracting executives from the law, retail, health care and media worlds.

Does Box have competitors?

Lots of them. Several top companies are offering cloud-based storage, with products like Amazon Web Services, Google Drive, Microsoft’s OneDrive, Apple’s iCloud, and Dropbox all competing for users. But the services all target different markets, and Box’s strength could be its popularity among large companies. About 275,000 companies use Box.

Who is Box’s CEO?

Aaron Levie, 30, is what you might expect of a Silicon Valley executive. A University of Southern California dropout, Levie founded Box out of his dorm room in 2005. He wears bright sneakers with snazzy business outfits. And he works pretty much non-stop. He also owns about 4% of the company.

So today was Box’s IPO. How is its first day trading on the New York Stock Exchange going?

Surprisingly well. Its initial public offering price of $14 was history by midday on Friday, with its stock rising as high as $24.73, up nearly 70% before cooling somewhat. Box sold 12.5 million shares at $14 a piece — above the expected $11-$13 range — raising some $175 million and giving the company a market capitalization of about $1.6 billion in the process. Box ended Friday at $23.15 a share.

Sounds like Box is doing great.

Not so fast. Its first day of trading has so far surpassed expectations, but the company has a lot of challenges. Besides sparring against well-funded competitors in the cloud storage business, Box has some financial troubles of its own. First, the company doesn’t make a profit: In fact, it’s lost a cumulative total of $483 million since its founding, partially due to sales and marketing expenses. It also delayed its IPO by nearly a year to wait for better market conditions, which made some observers nervous about the company’s future.

What’s next for Box?

According to Levie, Box is “just a couple months” into building services for particular industries, a business that’s likely to be profitable for the company. With all the new funding from its IPO, Box should also be able to more effectively invest in sales and marketing.

TIME Companies

SkyMall Files for Bankruptcy

Time to raise a giant, novelty wine glass to the demise of the inflight retail catalog

The parent company of in-flight shopping catalog SkyMall has filed for Chapter 11 bankruptcy, citing an increased prevalence of mobile devices on planes as the primary reason for the company’s flagging sales.

Xhibit Corp. and several of its affiliates, including SkyMall, have asked a U.S. Bankruptcy Court in Phoenix to supervise a sale of their collective assets, the company announced on Friday. “We are extremely disappointed in this result and are hopeful that SkyMall and the iconic ‘SkyMall’ brand find a home to continue to operate as SkyMall has for the last 25 years,” said Scott Wiley, Xhibit’s chief financial officer and acting CEO.

“With the increased use of electronic devices on planes, fewer people browsed the SkyMall in-flight catalog,” Wiley said in a bankruptcy filing.

The SkyMall catalog has long been an option for bored or curious flight passengers who could peruse its pages to find myriad products for purchase — from clothing and electronics to more non-essential fare such as glow-in-the-dark toilet seats or Justin Bieber Dental Floss. SkyMall’s widely diverse offerings cemented the catalog’s place in popular culture, inspiring parodies as well as blogs and listicles dedicated to its more perplexing products (a lithograph simply titled “Drunk Cat”?).

In recent years, though, SkyMall fell victim to declining sales as revenue dropped from $33.7 million in 2013 to just $15.8 million for the first nine months of 2014. In a court filing, Wiley blamed the fall-off in sales on the fact that more and more passengers now spend their flights engaged with their smartphones and tablets due to technological advances, such as in-flight WiFi, as well as evolving air safety rules that provide allow passengers to keep their mobile devices on during flights. Those changes “resulted in additional competition from e-commerce retailers and additional competition for the attention of passengers, all of which further negatively impacted SkyMall’s catalog sales,” Wiley said in a filing. “These technology changes, and the costs incurred by airlines in carrying a printed SkyMall catalog, have also made the traditional in-flight SkyMall catalog increasingly unattractive to the airlines.”

Xhibit asked in a bankruptcy court filing that the asset sale be completed by April at the latest and noted that “an expeditious sale process is very important.” The company said SkyMall’s cash reserves can support business operations through that target date, but noted that it is “critical” that the process wind down within the next few months.

This article originally appeared on Fortune.com.

TIME Companies

Expedia Snaps Up Travelocity for $280 Million

The Expedia Inc. homepage and logo.
The Expedia Inc. homepage and logo. Bloomberg—Getty Images

Another travel site Orbitz is reportedly looking for a buyer as well

Two major travel sites are about to be under the same corporate umbrella.

Expedia will be purchasing rival Travelocity for $280 million in cash. The two sites have been working together since 2013, when they signed a marketing agreement allowing Travelocity access to Expedia’s supply and customer service program in exchange for Expedia powering the technology platforms for Travelocity’s websites in the US and Canada.

Travelocity is currently owned by travel technology company Sabre. Sabre also owns Sabre Airline Solutions, Sabre Travel Network, and the Sabre Hospitality Network. Expedia’s brand portfolio includes the popular Expedia.com, plus other properties including Hotels.com and Hotwire.com.

More deals could be coming in the online travel booking arena. Orbitz is said to be actively looking for a buyer.

This article originally appeared on Fortune.com.

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