Kayak, a travel search engine has recently been acquired by Priceline.com for an amount of $1.8 billion.
It was in late 2010 when Kayak filed to go public, though it actually went public this July,. Their journey to the public markets is long and difficult one, as the company is facing a net loss . However things changed for the company during this year’s first quarter. It witnessed a revenue growth of 39 percent giving Kayak an overall acquisition of $73.3 million.
Kayak's net income was later raised to $8 million with its Q3 earnings. This indicates a rise of 14 percent in its income. Also, its mobile revenue got increased to a 63 percent per thousand queries while compared to the previous year and this added to over 3.5 million in its mobile revenue. Today it has reached a total of one billion queries with its mobile apps downloaded over a twenty million times.
These are all part of a reason for Priceline’s recent acquisition of the company. But this is not all. The company has recently grown its ‘direct booking options’ which was first launched in May 2011 as a white label service. This was mainly launched in order to improve its existing user experience. For this, it worked with various other companies like Travelocity, Air Canada, Getaroom, Expedia, Avis/Budget and Hertz/Advantage.
The launching of this white label service moved Kayak from being just one site for metasearch. It now allowed its users to complete most of their transactions on one site without having to visit third party sites. The company is now like an online travel agency. This is the real reason for Priceline’s recent acquisition of the company.
Though already representing a large number of hotels, Priceline believes that its acquisition of Kayak would widen its scope for distribution.
Kayak on the other hand will benefit from this acquisition by receiving the deepest supply line of hotels that Priceline has to offer. Its marketing efficiencies will thus be improved. It is also now partners with Expedia , while Priceline now enjoys being partners with TripAdvisor.