Tuesday, January 29, 2008

Yahoo! should! buy! Expedia! or! Orbitz!

Following last night's post pondering the state of Yahoo!, Silicon Valley guru Sramana Mitra has shared her thoughts on what Yahoo! should do next.

Given that it's probably losing the search battle with Google, Mitra reckons Yahoo! should snap up an online travel company.

But not just a content site or meta search engine. Oh no, aim high.

Yes, really high - like Expedia, Priceline of Orbitz.

"Yahoo should acquire one of them, and become a serious player."
A few questions about these pearls of wisdom:
  • How much should a company which has lost $20 billion in market cap over two years be willing to pay for a business like Expedia?
  • Is this really the right strategy?
  • How would the market react to a - still reasonably signifcant - search company owning a online travel company?
Mitra offers more advice on the GigaOm.

Kevin May, editor, Travolution

Hat-tip: The Boot

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JEB at buhlerworks said...

I don't quite see how the acquisition of an OTA could make Yahoo! a more significant business. The analogy would be for them to acquire a bank as they are active in the financial vertical.

I'd rather see them get much more aggressive in travel meta-search by leveraging their Farechase acquisition as they've started to do on Yahoo! Travel. Why not go all out and develop a semantic web focused tool as Kango is building - or acquire them outright at a much lower price tag than any OTA unless they would then convert those from a transaction and commission based model to becoming more of an ad revenue based business, but again, if that's the reason then why not stick to search?

Travolution Blogger said...

Jeb: i agree with you completely, thus why our slight (if not completely disguised) incredulity at the initial idea of a company like Yahoo buying Expedia.

Anonymous said...

I know for a fact that even if Yahoo made Farechase a default search for about half of their Yahoo Travel visitors they do not see this business as strategic. They look at it from entirely traffic and search information point of view.
So with all due respect they do not intend neither to buy an OTA nor to make Farechase strategic.
Certainly that would have been a logical move but ......
On top of that they intend to extend their exclusivity with Orbitz/Cheaptickets as the only OTA shown on Farechase. This effectively defies the purpose of having a metasearch as core part of your business.

Travolution Blogger said...

Anonymous: so what happens with Kelkoo?

Anonymous said...

The current state is that the agreement is for US only. I guess this will not change. So Kelkoo is safe.
It is similar situation with Kayak-Orbitz/Cheaptickets
Kayak.uk.co is not part of the agreement not to add new suppliers after signing with Orbitz/Cheaptickets

Travolution Blogger said...

Anonymous: thanks for the information. there is a question mark generally here in the UK about the long-term future for Kelkoo.