November 12, 2012

Priceline, Kayak - it’s all about mobile


Priceline.com's deal for Kayak Software doesn't make much sense at first, until you consider the revolution that is hitting every Internet business: mobile. Kayak has a popular mobile app, ranked No. 12 among travel apps for Apple mobile devices and No. 10 for Google's Android devices.

The sudden urgency could have something to do with the speed of the mobile revolution, as evidenced by comments from companies like Facebook and Google. And Kayak has a popular mobile app, ranked No. 12 among travel apps for Apple mobile devices and No. 10 for Google's Android devices, according to AppData.

Priceline's own mobile app is plenty popular, ranked No. 11 on both leaderboards. Considering that mobile users tend to access content via apps instead of the Web, it makes sense that Priceline would want to own more than one.

And at $1.65 billion net of cash, the value of the deal isn't outlandish at about 17 times Kayak's expected 2013 earnings before interest, taxes, depreciation and amortization. Still, with Google a large threat to Kayak's core desktop business, Priceline will have to hope Kayak's mobile business doesn't lose its connection.

Get the full story at The Wall Street Journal and The Street

Read also "Will Priceline capsize deals for Kayak customers?" at MarketWatch, "Priceline Buys Kayak: What Does This Mean For Fairsearch?" at WebProNews, and "Priceline-Kayak deal: Airlines are the winner" at Tnooz