Priceline to Acquire Kayak for $1.8 Billion

Kayak — a leading travel research Internet web site — has reportedly agreed to be purchased by Priceline for approximately $1,800,000,000.00, contingent upon approval by shareholders.

Assuming all goes as planned, the acquisition of Kayak by Priceline — headquartered in Norwalk, Connecticut — is expected to close by the end of the first quarter of 2013. Kayak is expected to remain as an independent entity within the Priceline group.

Reaction by FlyerTalk members is mixed. Some see this deal as a decrease in competition, while others believe that the deal is a brilliant move.

I am not sure that this means decreased competition. After all, there was never a way to book reservations directly through Kayak. Interestingly, Priceline is one of five featured Internet travel sites through which you can book a reservation using Kayak. I would surmise that the other choices of Internet travel sites such as Expedia will still be available as choices through Kayak, as it would make no sense to restrict Kayak through Priceline.

When Google purchased ITA Software, which developed the ITA Matrix software which powers Internet travel search engines — including Kayak, ironically — for approximately one billion dollars, there has not been any drastic changes or a noticeable difference in the competitive Internet travel site landscape…

…at least, not yet, anyway.

If there are any significant changes planned for Kayak after it is acquired by Priceline, I do not believe that they would occur anytime soon.

What are your thoughts?

Comments (Showing 1 of 1)

  • B1 at 10:08am November 12, 2012

    Priceline could simply own Kayak as a way to make whatever money if brings in. But assume that is not the case for the price they paid. They will have information about every search being performed – who is making it and for what trip and what agencies they are looking at. Before this, Priceline sent email follow-ups to those who searched on Priceline. Now, after you’ve done a search on Expedia from a Kayak link, you might just get a note from the Negotiator telling you about why you should try your search on Priceline. Also, Priceline will get comparison shopping of the other sites from Kayak based on the interests of real users. This seems to be a way to corner a larger markert share.

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