The boards of Microsoft and Expedia have approved the deal, according to reports, and an announcement is expected as early as today.
USA Networks, which owns the USA Network and Sci-Fi Channel cable channels, also plans to buy small travel company National Leisure Group, and to launch a new cable TV network focused on travel.
The acquisitions will significantly boost the company's presence in the online travel market. It already owns Citysearch, Hotel Reservations Network and Ticketmaster, the ticketing service for stadiums, theatres and other venues.
Microsoft owns about 70% of Expedia, excluding stock options. It is understood that shareholders will also be given the opportunity to sell shares to USA Networks. The exact value of the offer is not known, but it is thought that USA Networks will eventually own between two-thirds and three-quarters of Expedia's stock.