Travel Search Sites Kayak, SideStep Connect

    December 21, 2007

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 secured a spectacular round of funding, and proceeded to take over

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 and 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."