Austin-based HomeAway reportedly started off its search for a potential suitor nearly three years ago. But now,  the travel booking site Expedia wants to buy the short-term rental marketplace HomeAway for $3.9 billion to boost its presence in the vacation rental market.

According to Reuters, Expedia Inc. agreed to buy a vacation rental site HomeAway Inc. for about $3.9 billion in cash and stock, in a move that could increase the company's advantage over its competition with Airbnb. Expedia also expects to close the deal in the first quarter of 2016 after the regulatory approval.

And according to a proxy statement filed by HomeAway, it hired investment bank Qatalyst Partners in February 2013 to advise the company's board on a merger and acquisition activity in the Internet and travel industry segments and to advise HomeAway for its potential plans. As reported by My Statesman, since August 2015, the rental marketplace began its communication with four undisclosed potential buyers or investors, but none of them pursued the offer.

At a regular scheduled meeting, HomeAway management and directors "discussed the increased competition in HomeAway's industry and business challenges that HomeAway was facing, as well as changes HomeAway could make to its business to address some of those challenges," the proxy statement claimed.

"HomeAway had been facing those challenges for some time, and HomeAway management and the HomeAway board of directors had discussed possible changes to HomeAway's business model on several prior occasions, including the possibility of introducing a traveler fee to grow transaction-based revenue and the transition to a subscription and transaction-based revenue model," the filed statement added.

Moreover, the deal between the two rental companies come on the same day that the short-term accommodations  Airbnb won a significant victory in San Francisco. Voters shot down a measure that would put greater restrictions on those seeking to rent out rooms or the properties. Airbnb put in a dispute that its service helps homeowners stay in their residences by providing extra income through rentals.

Airbnb offers short-term rentals and HomeAway often targets travelers looking for one-week or longer stays. With that, buying HomeAway instantly allows Expedia to extend its choices for consumers beyond hotels.

HomeAway claims its $15 billion in bookings from its vacation rental listings. It also expects its online transactions to develop because of its team up with Expedia. "Maybe about a fourth to third of revenue is through (the) online booking channel,'' HomeAway CEO  Brian Sharples stated in a call with investors via USA TODAY. But in the next two to three years, he claimed that they are "hoping to have most of our transactions running through.''

To date, although the deal is still in process and in regulatory approval, HomeAway is with high hopes that the tie up will increase the acquisition activity of the company in the Internet and travel industry segments. But for the meantime, the HomeAway deal is set to become final during the first three months of next year.