Google is reportedly working on an airfare comparison site, according to Ryanair founder Michael O’Leary speaking to the Sunday Independent. O’Leary was much more candid about Google’s upcoming plans than the search giant itself is ever likely to be, describing Mountain View’s intent to build a price shopping engine for comparing airline ticket prices.
Existing sites that compare flight prices including Kayak, Expedia, Skyscanner and others are at a disadvantage compared to Google, in that it can act with complete independence from the airlines it lists. Many travel sites enter into marketing arrangements with their airline partners, which is understandable as that’s the obvious revenue model to exploit. Google, however, is seeking only access to the data of airlines, asking nothing in return in terms of payment, and instead selling its standard ads on the back of its ability to reach a massive audience.
O’Leary told the Independent that it would be sharing its ticket pricing “with all of the Google outlets,” making it possible to find routes and cheapest ticket prices, presumably on multiple platforms powered by Google software. It’s unclear exactly how this might work in practice, but presumably users Googling for airfare to a certain destination would see a comparison table of flight options in results, or this could be built in to something like Google Now, the personal assistant built in to all Android devices on later versions of that OS.
We’ve reached out to Google to find out more about these plans, and will update this story if they provide additional details.
Article courtesy of TechCrunch
Nara, a Cambridge, Mass.-based recommendation service, today announced that it is expanding its service from restaurant recommendations to also include hotels in about 50 cities in the U.S. and Canada.
Nara, which calls itself a “computational neuroscience company that analyzes and personalizes Web data,” always had the ambition to be much more than just a restaurant recommendation services, as its CEO Thomas Copeman told me when the company announced its $4 million Series A round last year. Its aim is to create a fully personalized web for its users and its current recommendation systems are essentially just a proof-of-concept for the company.
The company, which recently landed Singapore’s SingTel as its first telco customer, uses the Expedia Affiliate Network to power its online bookings engine and TripAdvisor ratings and review to give its users more information about hotels. At the core, however, Nara uses its neural networking-based recommendation engine to learn about its user’s tastes and create what the company calls a “Digital DNA” profile for each one of its users.
“From its inception, Nara.me was built to be a 21st century personal Internet portal,” said Thomas Copeman, chief executive officer and founder of Nara in a statement today. “Today’s announcement demonstrates our commitment to delivering more personalized and relevant content to our users across essential consumer lifestyle categories on the web. Our initial foray into restaurants and, now, hotels is just the beginning of Nara’s capabilities. We are excited to bring the next generation of search to the hospitality, travel, and leisure markets.”
Article courtesy of TechCrunch
There’s a new travel site launching that’s focused on bringing real-time bidding to the boutique hotel market. The site, called Stayful, was founded by travel industry veterans from Expedia and Hotels.com and has raised $2.4 million in seed funding to attack the market.
The idea behind Stayful is to let users negotiate room rates for unsold inventory at independent or boutique hotels. So it’s created a platform that does just that, providing a listing of available hotels and suggested bids, and then letting the consumer do the work of bidding.
To enable this, Stayful is working with various independent or boutique hotels, and scanning available spots to try to determine inventory. Once it’s done that, it algorithmically determines the fair market price of each room and then provides that as the suggested bid price. Users don’t have to take that advice, and hey, they can put in a lowball offer.
Of course, the hotel doesn’t have to accept that bid. It can counter with a price of its own, which the user can accept. Or it can shoot down the bid altogether. But once a bid is finally accepted, the traveler gets a discounted rate, the hotels book rooms that would have otherwise stayed empty, and everyone ends up happy. (Yay!)
For hotels that aren’t already part of the system, users can submit requests or bids and try to get them on board. It’s, like, one way for Stayful to show that there’s interest in them on the platform.
So anyway, why would a traveler want to go through the trouble of bidding on a place when she could just go to a discount travel site or Hotel Tonight or whatever? Because Stayful provides more transparency to travelers who want to stay at a certain type of hotel. Also, it kind of makes them feel awesome to name a price and have a hotel bend to their will.
And for hotels? Well they get another way to fill rooms, while also maintaining control over their price. They also significantly lower the cost of obtaining new customers.
Stayful was founded by travel industry veterans Cheryl Rosner and Shariq Minhas. Rosner is CEO, after previously serving as president of Expedia Corporate Travel and Hotels.com, while Minhas led engineering at Jigsaw, and worked for travel sites Expedia and Hotwire. The company has raised $2.4 million in seed funding led by Canaan Partners, and counts Joie de Vivre founder Chip Conley and Room 77 CEO Drew Patterson as advisors.
Article courtesy of TechCrunch
Room 77, a Mountain View, California-based company that operates a search engine for finding the lowest prices on hotel rooms, has closed on $30.3 million in new funding. This round, which counts as Room 77′s Series C, brings the total invested in the company to $43.8 million.
Travel search giant Expedia Inc. participated in the round as a new investor; existing investors in the company including Sutter Hill Ventures General Catalyst Partners, Felicis Ventures, Concur Technologies, Expedia’s founder Rich Barton, former Expedia CEO Erik Blachford, and Hotwire co-founder and current Zillow CEO Spencer Rascoff all chipped in as well.
The new money will be used to scale its product globally, the company says.
The hefty funding round shows a quick ascent for Room 77, as the company just launched in February of 2011. But it’s apparently a good time for hotel metasearch, and Expedia in particular is taking a keen interest in the space: Just last month Expedia spent some $630 million to acquire a majority stake in European hotel metasearch company Trivago.
From the start, Room 77 has adopted the strategy of doing one thing — hotel room search and booking — and doing it well. The company has built some pretty nifty features: It provides specific details about each hotel room at a property such as square footage, bed type, elevator proximity and if it is a connecting room. For each room, Room 77 also utilizes technology from Google Earth to generate a virtual “Room View,” which shows what you’ll see when you look out the window.
And while it may be a narrow focus, but it may be a very lucrative one. In a press release announcing the funding, Room 77 cites data that says the hotel vertical represents “the largest and most profitable category in online travel,” making more than $165 billion in gross bookings annually. The company says its own growth has been swift, and that its engine has facilitated the booking of “hundreds of thousands” of hotel rooms over the past nine months alone.
Article courtesy of TechCrunch
In a regulatory filing, Expedia said it will pay a total of about €477 million Euro, which is approximately $632 million in US dollars, in exchange for a 61.6 percent share of Trivago. €434 million of the deal is in cash, and €43 million is in Expedia stock. The deal is expected to close in the first half of 2013, pending regulatory approval.
Expedia, which is traded on the NASDAQ stock market, has a valuation of approximately $8 billion.
It’s a very good turnout for Trivago, which was founded seven years ago and has grown into an extremely popular — and profitable — hotel room search site for the European market and beyond. Trivago operates in 30 countries and expects to exceed €100 million in net revenue for 2012, according to a press release issued regarding the Expedia deal.
Today’s deal also seems to show a nice boost in valuation for the company since its last funding round. In the spring of 2011, Trivago sold a 25 percent stake to late-stage venture capital firm Insight Venture Partners for a reported €40 million – that’s an overall valuation of €160 million Euro. Today’s stake sale valued the entire company at nearly €800 million.
Article courtesy of TechCrunch
Priceline acquired Kayak for $40 a share, about $500 million in cash, $1 billion in Priceline equity, and about $300 million in stock options. Kayak got a premium price — a 29 percent premium, to be exact — from Priceline considering that, on the day of its acquisition, Kayak closed at roughly $31 a share. That’s about 54 percent higher than where Kayak was on IPO day, at $26 a share. This no doubt added to Priceline’s impression that Kayak was on the way up and that it was worth paying the big bucks to save it from having to deal with a strong competitor down the road.
While the big numbers are eye-catching, Kayak hasn’t always been in such an enviable position. The company first filed to go public in late 2010 and went public in July of this year — a long road to the public markets by any standard — and one that saw Kayak posting a net loss as recently as a year ago. It finally turned that around in the first quarter of this year, posting a Q1 net income of $4.1 million and grew revenue by 39 percent to $73.3 million.
Those numbers have been on the rise ever since, as Kayak posted its Q3 earnings on the same day that it was acquired by Priceline, with net income rising to $8 million, up from 14 percent from $7 million in Q3 2011. As we wrote in July after the company’s IPO, a big part of Kayak’s resurgence has been its focus on mobile. In its Q3 report, Kayak showed that its mobile revenue per thousand queries (RPM) had increased 63 percent compared to the same quarter in 2011.
So having seen 56 million mobile queries during the quarter, Kayak saw approximately $3.5 million in mobile revenue, which may not seem like a lot but is a large share of the company’s overall revenues.
On November 15th, Kayak announced that it had reached one billion queries in the first ten months of this year. This was significant for the company, because it first reached the billion-queries milestone in 2008 — after four years. It then took the company another three years to compile two billion more. In 2012, it took 10 months. As you can see, the time is telescoping significantly.
Additionally, as part of reaching this milestone, Kayak said that, as of October, its mobile apps had been downloaded over 20 million times. In Q3, Kayak saw 302 million queries across its web and mobile properties, a 31 percent increase from 231 million in Q3 2011 and saw a 95 percent increase over the year prior in its mobile downloads to 3.1 million.
This starts to paint a picture of why Priceline was so eager to snatch up Kayak, believing that catching Kayak in the early stages of what could be huge (and perhaps threatening) growth would save it some pain in the years to come. But this is really just part of it.
What really seems to be attractive to Priceline is the growth of Kayak’s direct booking option. The company first launched it as a white label service in May 2011 to improve its user experience, working with Travelocity and then Air Canada. Later this summer, it expanded that to include Expedia, Getaroom, Hertz/Advantage and Avis/Budget, etc.
In doing so, Kayak started to show the initial signs of moving beyond being a metasearch site, one that lives based on lead-generation and pushing users off-site to book their hotels, tickets and so on at the third-party sites it aggregates. With its direct bookings, users could stay on Kayak.com rather than being transferred to third-party sites, entering their credit card and personal info and finishing the transaction that way.
As many eCommerce companies know, this can be a huge boon for Kayak thanks to the improved booking experience. If users don’t have to leave the site, there’s a much stronger likelihood that they’ll actually complete the transaction. The more friction there is between intent and purchase, the better. And third-party sites get to reap the benefits as well.
And the best part for Kayak is that the bookings actually get processed through the reservation systems of their third-party players, so that Kayak doesn’t have to worry about that being on their servers. Nor do they have to deal with customer service or fulfillment.
On acquisition day, Kayak’s Book Path business represented 11 percent of its overall revenue (for Q3), up from 5 percent the year prior. Although Kayak would deflect such accusations, the company has really started to look more and more like an Online Travel Agency (OTA) than ever before, with hotels representing an increasing share of those bookings — the reason why Priceline had been intently paying attention to its progress.
Priceline represents a huge repository of hotels, working with more than 245K properties. Bringing Kayak under its wing allows it potentially to gain much wider distribution, while in turn helping Kayak speed up its push into hotels and international markets. Kayak already partners with Expedia, Travelocity, Getaroom and others, driving bookings for these affiliates, but Priceline arguably has the deepest hotel supply line to offer Kayak, so it makes sense, especially as it seems that the company has been looking to make a strategic shift to hotels.
On its conference call after its acquisition, Priceline and Kayak wouldn’t say too much about the deal other than the fact that it would help Kayak’s hotel business (and international expansion), along with improving Kayak’s marketing efficiencies. While citing marketing efficiencies initially strikes one as being a boring result or perhaps just a throwaway line as part of the deflective stance executives take on conference calls of that sort, it does mean something for Kayak.
The company spent 54 percent of its revenue on sales and marketing in the first half of 2012, with half of that going to offline branding and half spent online. Teaming up with Priceline means a better hotel supply for Kayak and getting access to the marketing machine that is William Shatner, i.e. the Priceline Negotiator. Said another way, Priceline has become pretty good at driving search traffic and its branding and marketing (especially in old media) are far more mature.
The other consideration, of course, is what becoming part of the Priceline brand means for Kayak’s partnership with Expedia and Priceline’s partnership with TripAdvisor. Expedia brands made up about 24 percent of Kayak’s revenue in the first half of 2012. If Kayak becomes stronger as a result of the acquisition, it might be smart business for Expedia to continue on course, but it also wouldn’t be surprising to see it looking to avoid sending cash to its biggest competitor. This choice may also be taken out of the equation if Priceline becomes more of a headliner in Kayak’s Booking Path, which would force Expedia to reduce its distribution.
On the other side, it would make sense for Priceline to move its spending from TripAdvisor to Kayak, in which case Expedia and TripAdvisor might be snuggling up.
In fact, some shuffling of the deck wouldn’t be all that surprising when you consider that the founding team at Kayak hailed from the bigs in the industry before they came together to launch Kayak. The company was founded in 2004 by veterans including Steve Hafner (CEO) a co-founder of Orbitz, Paul English (CTO) a former VP of technology at Intuit, Terrell Jones (Chairman), founder of Travelocity, and Greg Slyngstad (Director), founder of Expedia.
After the acquisition, the founders will be making out pretty well, as one can see from the company’s final S-1 filing. Paul English, as a result of his 7.8 percent stake, could make up to $122 million and co-founder Steve Hafner stands to see $94 million based on a 6 percent share of ownership.
And to that point, it’s worth taking a look at who really wins big from Kayak’s sale: Its investors. All told, investors had put in about $229 million in Kayak since its founding in 2004. Starting with General Catalyst, which helped incubate Kayak in the beginning, which had about 10.4 million shares after IPO, after which the firm bought up another 300K shares. So, as Bizjournals first noted, this means that General Catalyst holds a 26.7 percent stake in Kayak, which is valued at about $417 million — that’s close to the firm’s entire sixth fund at $500 million.
Furthermore, Sequoia owns roughly 16 percent of Kayak, which is worth some $251 million, Accel owns 12 percent at $195 million and Oak Investment Partners owns 10.5 percent, at $166 million.
Not bad for a few days work.
Article courtesy of TechCrunch
Fotopedia‘s travel apps have been downloaded over 12 million times since the company’s launch in 2011. Since then, the team has experimented with a number of monetization strategies, including paid apps, sponsorships and – most recently – its own ad platform. Today, the company is launching a partnership with Expedia that will make it easy for Fotopedia users to make travel reservations through the Expedia Hotels iOS app. While Fotopedia won’t comment about whether it is sharing revenue with Expedia, this is such a common model in the travel market that it’s highly unlikely the company didn’t strike a deal with the travel company.
Working with a travel company looks like an obvious choice for Fotopedia (besides the fact that their names are obviously pretty similar). While the company put a strong focus on coffee table book-like experiences in its early days, with apps that often featured thousands of images, it now takes a more magazine-like approach and is launching new but smaller apps at a steady pace.
For the time being, these new Expedia buttons in Fotopedia will only appear in the Fotopedia Paris and Japan apps, though chances are the company will expand this feature to some of its older apps and its upcoming releases as well. Expedia, a Fotopedia spokesperson told us, “is going to evaluate how this partnership performs and then they are free to extend it to all of Fotopedia’s upcoming and existing apps.”
In practice, this feature provides a link to the Expedia app when users look at pictures of landmarks. Clicking on the Expedia icon switches the user to the Expedia Hotels app (or opens up the App Store where users can download the app for free).
Article courtesy of TechCrunch
Duetto Research, a startup bringing a “big data” approach to the travel industry, has just raised $2.1 million in seed funding.
The company hasn’t launched yet, but co-founder and CEO Patrick Bosworth says the goal is to build applications around customer demand data from large travel companies. It’s starting out by serving small- and medium-sized lodging businesses (who could, for example, use the data to help with pricing and distribution strategies), and Bosworth plans to go live for Duetto’s first customers this summer. Eventually, he says he wants to help “companies in all travel verticals respond to changing market conditions and market demand.”
Bosworth previously worked as director of yielding and business strategy at Wynn Las Vegas, where his co-founder Marco Benvenuti was executive director of enterprise strategy. Duetto’s third co-founder, Craig Weissman, was CTO at Salesforce.com until June of last year.
There’s a big list of impressive investors. The round was led by Dan Scholnick from Trinity Ventures, with participation from Battery Ventures and Benchmark Capital. Individual investors include Salesforce.com CEO Marc Benioff, his co-founder Parker Harris, Expedia co-founder Rich Barton, entrepreneur and author Steve Blank, and many others. Here’s the full list:
Mark Lomanno: former CEO of Smith Travel Research (STR)
Quest Hospitality Ventures: investor in Nor1, Hipmunk, bCODE, newBrandAnalytics, ID90T
Brad Gerstner: Board Member at Nor1, Orbitz, Hotel Tonight, Room 77, Off & Away
Paul Reeder: Board Member, current or former, at ITA, Orbitz and USAirways
Rich Barton: former CEO/Co-Founder of Expedia, venture partner at Benchmark Capital
Michael Reichartz: CMO at Allegiant Air, former executive at Expedia
Sam Shank: CEO/Founder at Hotel Tonight
Ash Kapur: Vice President of Revenue Management at Starwood Capital Group
Nikhil Srivastava: Partner at KKR, investor in Travelport
Marc Benioff: Chairman/CEO at Salesforce.com
Steve Blank: Founder at e.Piphany, entrepreneurship author, lecturer at UC Berkeley
Parker Harris: Founder at Salesforce.com
Todd McKinnon: Founder/CEO at Okta, formerly at Peoplesoft, Salesforce.com and Facebook
Ross Fubini: Founder/CTO at CubeTree, Advisor at Palantir, Investor at Kapor Investments
Harlan Robins: biotech entrepreneur
Article courtesy of TechCrunch