On Jan. 23, nearly two years after the companies forged a marketing and technology partnership, Expedia announced that it had acquired Travelocity for a purchase price of $280 million in cash.

Travelocity, a travel-booking site owned by Sabre Corporation, was created in 1996 and was the first site to enable consumers to book airline flights online. This acquisition adds to Expedia's existing portfolio, which includes other consumer-booking sites such Hotels.com, Hotwire, trivago and CarRentals.com — as well as the fifth-largest corporate-travel management company worldwide Egencia.

The purchase is the logical follow-up to a 2013 agreement between the two travel sites whereby Expedia has been powering Travelocity's U.S. and Canadian websites and providing Travelocity access to Expedia's hotel supply and customer service program.

"The strategic marketing agreement we've had in place has been a marriage of Travelocity's strong brand with our best-in-class booking platform, supply base, and customer service," Dara Khosrowshahi, Expedia's chief executive, said in a statement last week. "Evolving this relationship strengthens the Expedia Inc. family's ability to continue to innovate and deliver the very best travel experiences to the widest set of travelers, all over the world."

Bloomberg Businessweek reports that the move allows Sabre to "focus more on its back-end system for selling airline tickets, hotel rooms and car rentals. Sabre is one of three global distribution system companies — along with Travelport and Amadeus — that handle sales for travel agencies and online booking sites like Expedia."

"Our primary focus at Sabre is to provide mission-critical software solutions to our global airline, hospitality, and travel agency customers — and to help them support their customers every day," said Tom Klein, Sabre president and CEO. "We have had a long and fruitful partnership with Expedia, most recently by partnering to strengthen the Travelocity business, so our decision to divest Travelocity is a logical next step for us both."

Expedia, which will turn 19 this year and is based in Bellevue, Washington, was founded in 1996 as a division of Microsoft. Since its inception, it has withstood multiple spin-offs, and with each move expanded its reach into the online travel service industry, resulting in the behemoth booking site that exists today frequented by an estimated 45 million visitors a month.

Add to that the 20 million travelers that Travelocity services monthly, and Expedia is now likely to become the premier booking site, creating even more competition for Orbitz and Priceline.

Consumers shouldn't notice any change in their booking activities, however, largely due to the technology agreement in place for the past two years. Essentially, this is a finalization of a "virtual merger" that is already in existence. Travelocity will continue its marketing efforts, which include the traveling gnome that has become associated with the brand over the past several years, and access to the Travelocity site will be uninterrupted and continue as usual.

The purchase of Travelocity by Expedia was announced the same week that Bloomberg reported that Orbitz — a smaller but still successful online booking site — is "exploring a sale." Online travel has become a big business, and the model for purchasing travel, including airfare, hotels and car rentals, has changed.

Over the past decade, the online travel industry has grown at an amazing rate. In 1999, the Travel Industry Association of America reported that more than 15 million U.S. consumers booked some type of travel online. The U.S. remains the largest travel market in the world and, that number, according to Jupiter Research, has grown to nearly 70 million in the past several years.

Bjorn Hanson, a New York University professor who studies the hospitality industry, describes what's happening in the online travel industry as a "classic scenario for consolidation." Consolidation helps create economies of scale by pooling marketing functions and IT departments, he added.

"There are too many channels/websites/service providers providing very similar services, and not all can survive," Hanson said. "Travelers are finding it a challenge to be aware of all of the providers, so consolidation of complimentary providers is a way for the best or strongest to become even better and stronger."