Orbitz.com will become MSN's travel provider

Financial terms were undisclosed. Orbitz.com and U.K.-affiliate ebookers.com will be the engine for all of MSN Travel's air, hotel, vacation package, cruise and car rental bookings.

"Our partnership with MSN will provide additional visibility and traffic to both Orbitz.com and ebookers.com, strengthening growth in both the United States and the United Kingdom," said Steve Barnhart, CEO and president of Orbitz Worldwide.

Expedia--which operates the Hotels.com, Hotwire.com and TripAdvisor brands, previously served as the travel channel on MSN.com and certain international MSN sites. Thomas Weisel analyst Jake Fuller said Tuesday that MSN had contributed close to 10 percent of Expedia's traffic--which could be material for Orbitz and bad news for Expedia.

He did maintain "Overweight" ratings on both stocks, estimating that MSN Travel accounted for less than 2 percent of Expedia's bookings and revenue, but said that with the MSN loss, Priceline cutting hotel fees and general concern over travel trends, he may not "chase (Expedia) stock today."

In response to an AP query, Expedia.com representative Katie Deines said, "We don't comment on the specifics of our negotiations but we were not able to reach a mutually beneficial agreement."

Orbitz shares fell 3 cents to $5.07 during afternoon trading. Expedia shares lost 47 cents, or 2.6 percent, to $17.74, after touching a new 52-week low of $17.50 earlier in the session.