Priceline has made partial cash and stock offer for Kayak shared that values the company at $1.8B.
Kayak doesn’t sell travel on its website but rather performs searches that the user initiates over multiple suppliers. Kayak then returns number of results and the buyer is transferred to the supplier’s website to finalize the purchase.
Kayak earns money from both advertising and referral fees that it gets from the travel providers.
Priceline also owns highly profitable Netherlands based Booking.com that operates completely independent from Priceline. According to the acquirer, the Kayak will continue to operate separate from Priceline.
It is interesting to see how this is going to play out. For now, the Kayak has been independent of its suppliers, where it sends the customers and from where it receives advertising and referral revenue. Not sure how happy they are going to be paying the fees if the company is owned by one of their competitors (Priceline).