Months After IPO, Priceline.com to Buy Kayak for $1.8 Billion
ust months after going public, Kayak Software has been snapped up by a rival.
On Thursday, Priceline.com, a travel company from an earlier Internet age, agreed to buy Kayak, a younger competitor, for $1.8 billion in cash and stock.
The acquisition, the largest in Priceline’s history, could provide a new source of revenue for the company.
Priceline, once a highflying company that survived the dot-com bubble in the late 1990s, acts as an online travel agent. It collects fees and commissions on reservations. Kayak, which was started in 2004, allows users to search other sites to compare prices. It makes most of its money from referrals and advertising.
“I see Kayak serving as a global entree into the advertising market for Priceline,” said Daniel Kurnos, an analyst at the Benchmark Company. He said the deal could help Priceline “with their search rankings and give them some additional expertise in the technology department.”
The companies’ global ambitions are also symbiotic. Priceline, which also owns the Asian travel site Agoda.com, has been pushing into new markets overseas. International reservations accounted for 78 percent of its total last year.
In the third quarter, Kayak’s revenue from outside the United States amounted to $17.3 million, a 40 percent increase from the period a year earlier, the company said when it reported earnings on Thursday. Overall third-quarter revenue rose 29 percent, to $78.6 million.