America Online (www.aol.com) announced on November 12 that it has partnered with and taken a minority investment in the travel search player Kayak Software (www.kayak.com). The two will build an AOL-owned travel search site, which will launch in early 2005, and which will be powered by Kayak's technology. Financial details of the transaction weren't disclosed.
AOL chose Kayak as a partner partly because of the team of online travel veterans behind its founding. CEO Steve Hafner formerly helped found Orbitz and chair Terry Jones founded Travelocity. The other factor was Kayak's vision of how consumers want to search for travel.
Kayak is part of a new generation of online travel companies that resemble search technology players more than travel agencies, because they crawl a vast number of travel providers' sites and present users with a view of their choices in a matrix. Other players include SideStep and Mobissimo, and Yahoo!'s FareChase. The new site, though, won't be connected with or linked from the AOL service, because of the exclusive deal AOL has with Travelocity (www.travelocity.com).
Brian Hoyt, a spokesperson for AOL, said that AOL found that there are essentially two groups of consumers, that the first group AOL already services on the Travelocity-powered AOL Travel, that there is a second group of consumers which are these travel searchers who are going to where the best price is, and that this second type of traveller would be interested in the Kayak-powered site.
