Kayak Buys Sidestep

December 21st, 2007 at 12:00 am
 


kayak sidestep

Many did not see it coming, so did I.  A couple of weeks ago, Kayak was raising more than $100 million.  It seemed odd for the to be doing this given that they already have more than $20 million in VC funding. It was only today that their reason for mising has been revealed.

It hasn’t been officially announced yet but somebody leaked the information out, Kayak just bought SideStep.  The official announcement will be tomorrow but the information leaked when CEO of SideStep  Rob Solomon told SideStep employees in an all-hands meeting.

Anyways, Kayak and SideStep are the leaders in online vending of airline tickets capping off at $2.5 billion and $1 billion respectively every year.  Though SideStep is also profitable, they have never surpassed Kayak in sales even if they have received more VC funding ($32 million).

The acquisition of SideStep by Kayak is not a usual one since the 2 companies are the direct competitors.  Imagine, it’s like Microsoft buying Apple or Google acquiring Yahoo.  Regardless, the merger will definitely increase the market share of both companies.

SideStep and Kayak will still be maintained and operated separately.  Sidestep is now a Kayak subsidiary and Kayak will now have free access to SideStep’s technology.

Sadly, some of SideStep’s employees will be laid off.  There will be a 60-day transisiton period and after that, it’s over for those who need to go. 

 [via TechCrunch ]