"Unfortunately, those trips were taken at lower rates, as hotels and airlines are slashing prices to attract business. As a result, sales dipped 8% to $636 million, but still checked in well ahead of estimates (as did earnings of $0.21 per share).

"I'm not too worried about average daily room rates and airfare ticket prices -- such metrics are a function of the broader economy rather than a reflection of the company.

"However, it is reassuring to see that when travelers are booking a room or a flight, they are turning to Expedia more than most other outlets combined.

"By growing faster (or in some cases falling less) than the overall industry, Expedia is actively taking market share away from competitors during this downturn.

"Management is acting aggressively to keep the heat on rivals like Orbitz -- it recently scored points with travelers by eliminating booking fees.

"There's no doubt Expedia is battling stiff competition on multiple fronts. But the company has gone to great lengths to ensure customer satisfaction and differentiate itself from the crowd.

"The firm's website is packed with user-generated content, advanced functionality (like searching by specific amenities such as high-speed Internet), and reassuring low-price guarantees that convert shoppers into buyers.

"And then there's TripAdvisor.com, a trusted resource that provides unbiased feedback and reviews on tens of thousands of restaurants, hotels, and attractions in nearly 200 countries.

"Believe it or not, online bookings only account for about one-third of this $800 billion-plus global industry. That means there is still plenty of untapped potential, particularly in fragmented foreign markets.

"Expedia benefits from a powerful network effect, as well. The firm's vast inventory of over 80,000 properties helps attract millions of visitors, and that wide audience in turn provides greater clout when negotiating wholesale rates with merchant hotel suppliers.

"Recent market share gains and expanding net revenue margins (the percentage of gross bookings converted into actual revenues) should help the company hit the ground running once the economy is back on track. In the meantime, the shares are still on course for a final destination in the lower $30s."

Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.