WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

       Date of Report (Date of earliest event reported): January 23, 2002

                                  EXPEDIA, INC.
               (Exact Name of registrant as specified in charter)

                 (State or other jurisdiction of incorporation)

                            (Commission File Number)

                        (IRS Employer Identification No.)

                        13810 SE Eastgate Way, Suite 400
                               Bellevue, WA 98005
                    (Address of principal executive offices)
                                   (Zip Code)

       Registrant's telephone number, including area code: (425) 564-7200


          (Former name or former address, if changed since last report)

Item 5. Other Events.

On January 23, 2002, Expedia, Inc. issued a press release announcing that it had
entered into an agreement to acquire certain of the assets, and assume certain
of the liabilities, of Classic Custom Vacations, a California corporation and a
wholly owned subsidiary of Classic Vacation Group, Inc., a New York corporation.
In connection with the transaction, Expedia agreed to first purchase all of the
outstanding debt of Classic Vacation Group in exchange for approximately $47
million in shares of Expedia common stock. If the aggregate net proceeds to the
Classic debt holders from the sale of such shares is less than $47 million,
Expedia will fund the difference in value by issuing additional shares or paying
the remainder in cash or both. If the aggregate net proceeds exceed $47 million,
the excess will be returned to Expedia. Expedia will then acquire the assets of
Classic Custom Vacations for an aggregate purchase price of approximately $52
million (consisting of approximately $5 million in cash plus the cancellation of
the $47 million of debt) plus the assumption of certain liabilities.

Item 7. Exhibits. The following item is attached as an exhibit hereto:

Exhibit 99.1 Press release of Expedia, Inc. dated January 23, 2002.


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      EXPEDIA, INC.

                                         /s/  Gregory S. Stanger
                                      Name:   Gregory S. Stanger
                                      Title:  Sr. Vice President and
                                              Chief Financial Officer

Dated: January 23, 2002