Puns aside, this could mean serious trouble for Kayak, a company that has done remarkably well in an industry that is really hard to crack. If you haven’t used Kayak before, it is a great place to find cheap flights, and to a somewhat lesser extent rental car and hotel deals. Kayak has a rumored valuation of around $1 billion and has certainly tested the waters (yes, we’re going to keep these aquatic references coming) on an IPO. But with Google now firmly in the travel business – $700 million isn’t chump change, even for Google – Kayak, Orbitz and a host of other sites may have a hard time convincing anyone moving forward that they are horse to bet on.
Don’t get us wrong – we absolutely adore Kayak – it’s one of the Web’s most useful sites (as well as one of the best iPad apps), but when Big G steps into the room and starts to throw their weight at what is just about a pure web business (and a transactional one at that, which they especially excel at) any company needs to be very worried. Really, think about it – you want to search for “cheap flights” and you plug that into Google.com – what site do you think Google will start highlighting?
That said, if Google ends up winning this sector, it won’t happen over night. First of all, from what we’ve read they plan to keep ITA basically intact for awhile at least. Secondly, even when Google does plan to fully integrate an acquisition into the mother ship (see, told you we’d get more aquatic references in) it sometimes takes years (see DoubleClick & Grandcentral). So for right now, Kayak should be able to hold it’s own just fine, but as far as an IPO goes, investors are certainly going to have a lot of questions about Google’s move today how that relates to Kayak’s long-term health.
Finally, we’d just like to leave you with this…