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6 commentsFriday, December 21, 2007
By Doug Caverly
In the official press release, forms of the word "merge" are used four times, "purchasing" comes up once, and "acquire" and "buy" are nowhere to be seen. Nonetheless, the bottom line is that Kayak.com secured a spectacular round of funding, and proceeded to take over SideStep.com.
Kayak and SideStep are both in the travel search business; prior to this development, they were often seen as competitors. But in the same turning-the-world-on-its-head press release, the co-founder and CEO of Kayak insists, "With less than 10 percent overlap between existing Kayak.com and SideStep.com users, each site stands to gain millions of new users."
Which could justify why Kayak was willing to spend something in the neighborhood of $200 million on SideStep. Michael Arrington, who seems to have broken the story, puts the number nearer to $180 million. One thing we're sure of is that Kayak acquired $196 million at the same time, so large amounts of cash were definitely moving.
Data and personnel should also be shared, thereby explaining the use of the word "merge." Yet the Kayak and SideStep brands are to be kept separate, according to the company line, and appear ready to expand into various geographic locations independently.
In his coverage of the development, Om Malik added one more interesting thing to consider: "Stifel Nicolaus & Co. analyst George Askew today cut his ratings on online travel sites, saying economic weakness and increasing competition will take its toll on the business."
By nicoduka (WPN reader) - Mon, 04/07/2008 - 13:43
SideStep, the travel search
SideStep, the travel search engine, has raised $15 million in a third round of funding to help it stay competitive and to venture into other areas.
The travel industry is packed. Other players offer search. But they also make money from selling travel tickets, something SideStep doesn’t do. These companies include Expedia, Travelocity. There’s Kayak, which offers a similar search engine. There are niche sites too, such as fare-prediction site Farecast and user-generated site, RealTravel.
Sidestep’s funding comes from Norwest Venture Partners, and continues an incestuous trend among venture firms and the travel companies they support. Besides the Santa Clara, Calif.-based SideStep, Norwest has backed Indian tavel company Yatra, and Sulekha, another Indian company that has travel features among other things.
Sidestep is probably happy to take the money, even if it knows the danger of having a VC with conflicts. It learned its lesson back in 2004, when it held several meetings with venture firm General Catalyst, during which Sidestep spilled its business strategy to the firm, only to see the firm back out and invest in competitor Kayak instead.
And then there’s Accel, which has invested in Kosmix, a search engine that has a travel component, and Kayak.
Other investors in Sidestep include Trident Capital, Leader Ventures and Saints Capital.
In a statement, Sidestep said it wants to use the money build out media and user-generated offerings. Sidestep offers a comparison-shopping Web site, with options from more than 600 airlines, 150,000 hotels and 30,000 car rental locations worldwide. It offers vacation packages and, — via its purchase of TravelPost.com — extensive hotel reviews and travel blogs. It has more than five million users a month.
Also, we shouldn’t forget that Jamis McNiven, owner of the famous VC breakfast hangout, Bucks Restaurant, is launching his own travel company, Landfrog, this quarter.
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