Kayak bought by Priceline

Travelers may soon have a few surprises when searching for the best prices as they try to buy plane tickets and rent cars or hotel rooms, because price-comparison site Kayak is being acquired by travel shopping site Priceline, as USA Today informs.

Jeffery Boyd, Priceline’s President said the reasons they made this 1.8 billion dollars investment is for Kayak’s innovation and world-class technology. On the other hand, the thing that Kayak appreciated is that “global reach and expertise will accelerate” their growth and will help them “develop as a company”. Yet the main difference between them is that Kayak is a referral service to either travel agents or airlines, while Priceline is an online travel agent that actually sells tickets.

Norm Rose, president of Travel Tech Consulting in California, asks the big question concerning the acquisition: whether Kayak will be able to continue referring customers to other travel agencies when it is owned by one.

“For the consumer, it’s not as big a deal, other than that having Priceline behind Kayak is a very strong combination. That can only lead to more innovation and more choice”, Rose stated. He concluded that “for the travel industry, it’s a big deal because of all the dynamics about distribution”.

After being bought, Kayak will continue to function independently as a Priceline Group company. The promised 1.8 billion dollars are 500 million in cash and 1.3 billion in stock and the deal is expected to be sealed in the first quarter of 2013.