After all, as human travel agents have become nearly extinct, as the smartphone age begins, the rage for online booking a vacation in Nepal will become as compelling and easy as booking a reservation at 8 at a local restaurant.
Over the past 15 months, several highly desirable sights got snapped up. Google (Nasdaq: GOOG) bought private Zagat Surveys for a reported $220 million. TripAdvisor (Nasdaq: TRIP) acquired private Holiday Watchdog for an undisclosed sum.
Shares of some websites in the sector rose in Friday trading, including OpenTable (Nasdaq: OPEN), the restaurant booking service; Orbitz Worldwide (NYSE: OWW) as well as Barry Diller's IAC Interactive (Nasdaq: IACI), which controls Expedia (Nasdaq: EXPE) and Hotwire, which is not listed.
“Travel is an obvious fit for mobile online search,” said Jefferies analyst Brian Pitz.
As well, shares of San Francisco-based Yelp (Nasdaq: YELP), which provides recommendations and, like Kayak, has only been public a few months, rose 15 cents to $17.92
Meanwhile, shares of Priceline, whose best-known symbol is “Star Trek” pitchman William Shatner, fell $2.03 to $625.84, while those of Kayak rose $8.29 to $39.33, only slightly below the $40 offering price. Both companies are in Norwalk, Conn.
For Kayak, the irony is that Priceline's bid came only four months after its successful $91 million initial public offering in an Internet IPO market severely damaged by the $17 billion Facebook (Nasdaq: FB) fiasco on May 17 and its first trades the next day.
Obviously, Priceline could have paid far less for Kayak before the IPO, but the exercise allowed that site's principal investors and CEO, Stephen Hafner, to boost his wealth, as well as for some of his investors including Sequoia Partners, an investor in Google, to book profit.
Kayak was among several companies that protested to the U.S. Federal Trade Commission last year when Google acquired booking agency ITA Software for $700 million. Google, of Mountain View, Calif., continues to be under scrutiny by the FTC as well as the U.S. Department of Justice for allegedly using its market power to dominate search, online ads, browser and smartphone software.
Obvious bidders for some of the smaller sites could include Google, which reported cash and investments exceeding $40 billion as of Sept. 30; Apple (Nasdaq: AAPL), the most valuable technology company, which reported cash and investments exceeding $117 billion as of Sept. 29, and Microsoft, which reported cash and investments exceeding $66.6 billion as of Sept. 30.
But the concept of online booking might hold appeal to two other sectors: mobile telephone carriers headed by deep-pocketed AT&T Inc. (NYSE: T), Verizon Communications (NYSE: VZ) and Sprint Nextel Corp. (NYSE: S); Sprint itself plans to be controlled by mid-2013 by Japan's SoftBank Corp. (Tokyo: 9984), which itself is a major content site and still controls Yahoo Japan.
Yahoo (Nasdaq: YHOO) itself, now under a new CEO, might also be interested, especially because it's received massive piles of cash from unloading foreign assets, including minority stakes in China's Alibaba Group, an online site.
The other sector is online services, notably including eBay (Nasdaq: EBAY), the No. 1 auction site, as well as Amazon.com (Nasdaq: AMZN), the top electronic retailer. Now that Amazon has a smash hit with its Kindle Fire tablets and is rumored to plan its own smartphone products, travel and reservations could be an obvious expansion.