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Kayak touts mobile growth in IPO

July 10, 2012 | Online Travel

With Kayak’s long-delayed IPO finally moving forward, the travel search site’s updated S-1 filing highlights the growing importance of mobile to its business, along with the challenges it brings.

On the plus side is the increased use of Kayak’s mobile properties, supporting overall revenue growth. The company says its mobile applications were downloaded 2.3 million times in the second quarter, up 40% from the year-earlier period. Its apps for smartphones and tablets on major platforms like iOS and Android have been downloaded a total of 15 million times since 2009.

Kayak also attributes its 31.5% revenue growth in the last year to $224.5 million largely to increased travel-related queries on its Web sites and mobile apps, which increased 44.9% in the first quarter of 2012, and 41.7% for full-year 2011. Searches conducted on mobile apps accounted for almost 17% of total queries in the first quarter, up from 11.6% a year ago. But here’s the problem: Revenue from apps made up just 2% of total revenue in the first quarter and in 2011.

Kayak notes in its IPO filing that the increase in query volume was partially offset by a reduction in RPM (revenue per thousand travel searches) “due to an increase in mobile queries, for which we earn revenue at a lower rate.” The RPM dropped 7.1% in 2011, and 4% in the first quarter.

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