Expedia, the parent company to some of the world's largest travel sites, is buying short-term rental site HomeAway for $3.9 billion, a move that further solidifies its spot at the center of online travel. The deal, announced today and agreed upon by both companies' boards, is expected to close in the first quarter of next year.

Expedia paid $38.31 for each share of the Austin, Texas-based HomeAway, marking the largest-ever acquisition for the travel site. HomeAway investors responded favorably to the news, sending its shares up $6.88, or roughly 22 percent, in after-hours trading. "We have long had our eyes on the fast-growing $100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years," Expedia CEO Dara Khosrowshahi said in a statement.

Trying to stave off the growing threat of Airbnb

Since being spun off from online conglomerate InterActiveCorp in 2005, Expedia has made several big acquisitions to fend off would-be challengers. Its acquisition strategy has become more aggressive as Airbnb has grown into a viable hotel alternative with a $25.5 billion valuation. In January of this year, Expedia paid $280 million to acquire competitor Travelocity. It spent $1.2 billion to scoop up Orbitz.com a month later.