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Travel Search Sites Kayak, SideStep Connect

Kayak quickly spends its Christmas money

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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."Travel Search Sites Kayak, SideStep Connect

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."

Travel Search Sites Kayak, SideStep Connect
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  • http://blog.kango.com/kango_news/kayak_sidestep_merger_highlights_trends_in_online_travel_139.html Elliott Ng

    The point you made about the 10% overlap in traffic, demonstrates that there is still growth opportunity beyond travel booking. We think about online travel as addressing 4 stages: planning, shopping, booking, and sharing. Kayak and Sidestep address shopping, and together represent a microscopic part of the of $80 billion online booking market, which in turn represents a still small penetration against the $700 billion total US travel market. Thanks for your insights on this merger and we put our take on the Kango.com blog.

  • http://www.fatpassport.com FatPassport

    I am surprised that they claim only 10% overlap in their respective markets – I for one have used both (and ultimately chose sidestep because of ease-of-use) and they seem really similar. Do they have different marketing tactics perhaps?

    • http://www.vipdistinct.com/agent/ travel agent atlanta

      You’re right on pointing that out. I don’t think the overlap is only 10% – it must be higher. Even their sites look rather similar and they are both in the industry of online travel and flight booking so I don’t see how it’s only 10%.

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