Travel Search Engine Kayak Files For $50 Million IPO
Here are some interesting stats included in the filing. For the nine months ended September 30, 2010, Kayak generated $128 million in revenues, growing by 48% from last year. For the third quarter ended September 30, Kayak generated $48 million in revenue, representing a growth of 80% from last year
From January until September, the travel site processed more than 469 million user queries for travel information, which grew by 37% from last year. For the last quarter, query volume increased 50% compared to the same period in 2009. Kayak’s mobile applications have been downloaded nearly four million times since March 2009. In the third quarter alone, Kayak saw one million downloads, representing growth of 152% compared to the same period in 2009.
Another interesting tidbit from the filing refers to ITA Software, the flight information giant that Google is trying to buy. Kayak says that one of its risks is that it depends on a third=party to query airfare results. Kayak licenses faring engine software from ITA under an agreement which expires on December 31, 2013. ITA’s software powered 42% of Kayak’s overall airfare query for the year. Airline travel queries accounted for approximately 85% of the searches performed on Kayak for the year and distribution revenues from airline queries represented approximately 26% of its revenue for the past nine months.
Here’s what Kayak said in relation to the Google-ITA deal:
“If completed, Google could pursue the creation of new flight search tools which will enable people to find comparable flight information on the Internet without using a service like ours. According to Experian Hitwise, in September 2010, approximately 30% of travel searches began with Google. Upon completion of its acquisition of ITA, this number could substantially increase, as Google may choose to offer services that directly compete with the services we offer. Google may also cause ITA not to renew any agreements with us, or to renew agreements with us on less favorable terms. If ITA or Google limit our access to the ITA software or any improvements to the software, increase the price we pay for it or refuse to renew our contract and we are unable to replace ITA with a comparable technology, we may be unable to operate our business effectively and our financial performance may suffer.”
That seems to be a significant risk for Kayak-and many thought that the Google-ITA deal would put off Kayak’s IPO for some time. But The Google-ITA deal under investigation, it’s unclear whether the Justice Department will give Google a pass on this one, especially since the online travel industry has been very against the deal.
Kayak, which has raised $22 million in funding, was formed in January 2004 by co-founders of Orbitz, Travelocity and Expedia. The company co-founders include 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.
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