The big news yesterday in the travel search and booking space was that Priceline was buying Kayak for $1.8 billion. That’s a big price tag (more than 100x annual earnings based on what I’ve seen) and potentially a huge shake-up in the market. Or is it? Does a transaction like this actually matter to consumers?
Assuming the companies stick to their word, the net impact of this is a positive one. Priceline has a much stronger global footprint and more resources to help Kayak expand their coverage. That’s a good thing. And the initial announcement indicated that the Kayak management is remaining in place and that they will be running Kayak as an independent organization under the Priceline umbrella. So that means a bigger, better Kayak with more resources to throw at their efforts to make things bigger and better.
But there’s also a somewhat real risk that things could get ugly. With Priceline being one of the suppliers Kayak includes in their comparison matrix that leaves a lot of potential for results to be skewed in favor of their sibling. Google already does this to a limited extent with some of their properties and Kayak is more or less the equivalent to Google in the travel meta-search space so it isn’t like that would be unprecedented. Unlikely, at least for now, but not unimaginable.
Other than that, it doesn’t really seem like there’s all that much to be worried about with this move. At least for now.
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The prudent traveler verifies prices in at least two places, so for me at least, any preferential treatment given to Priceline via Kayak is unlikely to cost me any extra.
I don’t think there was much change after Google bought ITA. I hope the same occurs here.