Travel search engine Kayak.com is paying $196 million to acquire its closest competitor SideStep.com. Both are search engines to help travelers find the best prices on airfare, hotels, and car rentals. Like most search engines, they make money with partnerships and advertising.
The deal was financed from many sources, starting with Sequoia Capital, General Catalyst Partners and Accel Partners. SideStep investors include Norwest Venture Partners and Trident Capital. New investors Oak Investment Partners and Lehman Brothers Venture Partners.
They do plan to keep both sites separate in style and branding but combine some of their technology. Kayak looks more like a search engine, while SideStep is has a richer interface and more content (Kayak’s blog could use some influence from SideStep). Kayak has some plugins and widgets while SideStep has a review site and social network for travelers.
Both companies are profitable. Kayak reached about $50 million in revenue this year, while SideStep is at about $35 million. Together they hope to compete against #1 travel search site (based on number of searches) Expedia.
For now the sites mainly service the U.S. but they plan to expand offerings internationally. With the new year they plan to launch sites in India and China.