Desperate times call for desperate measures benefit consumers. As online travel agencies slug it out in the hunt for market share, many are starting to cut booking fees -- ironically, in stark contrast to what the airlines themselves are doing. While the airlines are looking to squeeze every last ounce of revenue from each passenger mile, the websites that put people in seats are hungry for any competitive advantage they can find.

Orbitz Worldwide (NYSE: OWW) has permanently kicked its airline booking fees on both domestic and international flights. Travelocity is following suit, to a limited extent, at least, by continuing to wave booking fees ... a measure that Expedia Inc (NASDAQ: EXPE) is taking, as well. What started as promotions are fast becoming the norm.

Internet tycoon Barry Diller, who is splitting up his IAC/InteractiveCorp (NASDAQ: IACI) conglomerate, has been adding to his position in Expedia Inc. (NASDAQ: EXPE), the Internet travel site where he's also chairman.

According to Reuters, Diller exercised options to buy 9.5 million shares at $8.59, giving him a 27.7% stake in the company. Judging from the company's recent performance, he may be onto something.

Net income soared 69% to $99.6 million, or 32 cents per share, compared with $59 million, or 34 cents a year earlier, the Bellevue, Washington-based company said today. Revenue rose 24% to $759.6 million. When one-time items are excluded, Expedia said its earnings were 39 cents, beating the 37 cents expected by analysts surveyed by Reuters.

"Expedia succeeded on almost every financial metric during the third quarter," crowed an ecstatic Diller in the earnings release. "These are good results, and our ability to keep them coming depends on the right balance of investment and profitable growth -- and I think we've shown our ability to be in proper cadence with those levers throughout this year."

Though the results were impressive, I am still have my doubts about the online travel business because it's so price competitive. But investors clearly aren't as pessimistic as I am since Expedia shares are up more than 43% this year.