Travel search acqusitions near?
4/17 Update:
Heather Dougherty, an analyst with Nielsen/NetRatings, was quoted in a NYT article today titled For Travelers, a Way to Save More Dollars While Using Fewer Clicks stating that she "believe[s] that Google and MSN may simply follow Yahoo's lead and buy the niche search players. "I've always thought pretty much all of them are ripe for acquisition," said Ms. Dougherty, of Nielsen/NetRatings. "If someone wants to play catch-up fast, that's the way to go." Could not agree more, and think it will be interesting to see how the various players marry up or not over the next several months.
4/12 Post:
My guess is that one of the privately held travel search engines will be aquired in the next 6-12 months. The factors that lead me to this conclusion are 1) TSE traffic and revenue is soaring, thus validating the model, and 2) the most realistic acquirers are in either a stronger financial position or more ideal strategic position.
From eyefortravel.com post on E-consultancy 2006 Shopping Comparison Engines Buyer’s Guide "The amount of traffic to shopping comparison sites is growing at a very healthy 30 percent year on year, yet market revenues outstrip this figure. Revenue growth of up to 500 percent has been reported by comparison engines, driving massive amounts of sales to merchant partners." Keep in mind, the guide profiles of 12 major shopping comparison engines in the U.K., however I assume similar growth trends exist in the U.S. for TSEs.
In my mind, potentail acquirers include: Google, Expedia, Cendant, Sabre, AOL, IAC, Amazon, and Microsoft/MSN. In a recent article from CNNMoney titled What Google should do with its $10 billion war chest "...Bill Tancer, general manager of global research with Hitwise, an Internet research firm, thinks... online travel search is another area Google should target, with sites such as privately held SideStep, Kayak and Mobissimo being possible buyout candidates." I agree with Bill, and believe the travel search category might be a great fit for Google.
The OTA conglomerates might look at a TSE acqusition as a diversification move, defensive move, and/or way to create product differentiation. In an article from The Street last month titled Online Travel Stocks Stranded, Aaron Kessler, an analyst with Piper Jaffray, states "domestic [market] is going to be a challenge... Like other Web-based services, online travel is no longer a novelty. Competition is intensifying as airlines and hotels expand their efforts to get travelers to buy on their sites. Plus, there's the added problem of specialized search engines, including Kayak and Sidestep. These operations help people find the best deal by comparing prices over multiple sites.
Who knows what the future holds, but either way, it should be an interesting several months in online travel...
Heather Dougherty, an analyst with Nielsen/NetRatings, was quoted in a NYT article today titled For Travelers, a Way to Save More Dollars While Using Fewer Clicks stating that she "believe[s] that Google and MSN may simply follow Yahoo's lead and buy the niche search players. "I've always thought pretty much all of them are ripe for acquisition," said Ms. Dougherty, of Nielsen/NetRatings. "If someone wants to play catch-up fast, that's the way to go." Could not agree more, and think it will be interesting to see how the various players marry up or not over the next several months.
4/12 Post:
My guess is that one of the privately held travel search engines will be aquired in the next 6-12 months. The factors that lead me to this conclusion are 1) TSE traffic and revenue is soaring, thus validating the model, and 2) the most realistic acquirers are in either a stronger financial position or more ideal strategic position.
From eyefortravel.com post on E-consultancy 2006 Shopping Comparison Engines Buyer’s Guide "The amount of traffic to shopping comparison sites is growing at a very healthy 30 percent year on year, yet market revenues outstrip this figure. Revenue growth of up to 500 percent has been reported by comparison engines, driving massive amounts of sales to merchant partners." Keep in mind, the guide profiles of 12 major shopping comparison engines in the U.K., however I assume similar growth trends exist in the U.S. for TSEs.
In my mind, potentail acquirers include: Google, Expedia, Cendant, Sabre, AOL, IAC, Amazon, and Microsoft/MSN. In a recent article from CNNMoney titled What Google should do with its $10 billion war chest "...Bill Tancer, general manager of global research with Hitwise, an Internet research firm, thinks... online travel search is another area Google should target, with sites such as privately held SideStep, Kayak and Mobissimo being possible buyout candidates." I agree with Bill, and believe the travel search category might be a great fit for Google.
The OTA conglomerates might look at a TSE acqusition as a diversification move, defensive move, and/or way to create product differentiation. In an article from The Street last month titled Online Travel Stocks Stranded, Aaron Kessler, an analyst with Piper Jaffray, states "domestic [market] is going to be a challenge... Like other Web-based services, online travel is no longer a novelty. Competition is intensifying as airlines and hotels expand their efforts to get travelers to buy on their sites. Plus, there's the added problem of specialized search engines, including Kayak and Sidestep. These operations help people find the best deal by comparing prices over multiple sites.
Who knows what the future holds, but either way, it should be an interesting several months in online travel...
posted by Mike Fridgen at 8:33 PM
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