Priceline KAYAK deal about expansion, efficiencies and mobile but not move into air

By Travolution
By Travolution
November 8, 2012 10:42 PM GMT

Priceline.com says it intends to build KAYAK into a global travel planning brand and it does not expect the acquisition to put off potential advertisers on the meta-search site.

Speaking to investors after announcing the $1.8 billion buyout Priceline bosses said the deal will see benefits on both sides in terms of technology and operating costs.

The price tag is thought to make the deal a record in the online travel sector dwarfing the $700 million Google paid for ITA Software in 2010.

Jeffery H Boyd, Priceline chief executive and president, said: “Our primary focus will be building value for customers and advertising partners.

“We will share best practice across all our brands and we believe we can build KAYAK’s international business.”

Priceline made specific reference to the advances in mobile that KAYAK have made, suggesting this is an area it intends to place more focus on.

Boyd said he did not believe the acquisition would put off any advertiser currently working with KAYAK, which will be run as a standalone company under the current management.

“Our primary focus will be on continuing to provide great choice for their customers and a great source of growing business as an attractive ROI for their advertisers. We do not expect that to change.

“We think there are potential benefits of the acquisition that hopefully will provide efficiencies and opportunities for both KAYAK and other group brands.”

Boyd said the deal did not signal a move away from Priceline’s focus on hotels and into air.

“Our primary focus for the group will continue to be around hotels and that’s been a primary focus for KAYAK. It has a great air product and I think there are potential opportunities and that will be supported going forward.

“But you should not view this as an attempt by our group to get more deeply into the airline ticket business.”

Technology benefits are expected to accrue from the deal but Boyd said, as with previous acquisitions, there would not be a major integration of technology platforms.

“We believe there will be mutual benefits from sharing best practice and technology from Priceline and KAYAK.

“Our experience with other acquisitions is that we always learn a lot from new companies joining the group. This is particularly true with KAYAK and the progress they have made in mobile.

“They have a great shop up in Boston and we are very excited about working with their engineers and our engineers and having the best of both worlds.

“There is no going to be substantial integration in terms of shared platforms but there will be a lot of cross pollination and knowledge and best practice.”

Boyd would not be drawn on any relationships KAYAK currently has with partners and whether this deal would have an impact.

In particular he was asked to comment on the Google ITA tie-up which KAYAK has been a prominent critic of, but he declined to make any comment.

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