RealTime IT News

AOL, Kayak Team For Travel Search

AOL is teaming with Kayak Software to build a free travel search offering, the company said Friday.

Currently in beta, Kayak is the brainchild of the founders of Orbitz, Expedia and Travelocity. AOL said it took a minority investment in Kayak as part of the deal. The move comes as more players crowd into the travel search sector.

The plan is to create a Web-based travel search property, AOL said, powered by Kayak's travel search engine. This will dovetail with AOL's other e-commerce offerings. It is expected to launch in early 2005.

The move would mark the latest e-commerce offering from AOL's constellation of partner commerce sites that are plugged into its network. It also means AOL would be able to take in more tolls for every travel purchase it helps sell through its Kayak-powered site. Driving its subscriber base of 23 million to a travel-search site could help the ISP replace revenues as it loses dial-up members to other broadband providers.

David Lebow, executive vice president and general manager of AOL Media Networks said travel is a sizable and growing area and a primary category of focus for AOL Media Networks, especially as the company builds out its suite of travel products, both on the AOL service and on the Web.

AOL's effort to bring travel search to its customers comes at a time when new entrants -- as well as online customers -- are swarming into the travel-search sector. Research on online travel booking helps explain why.

JupiterResearch, which is owned by the same company as this site, said the U.S. online travel market has grown at a fast pace over the last year. Sales totaled $54 billion in 2004, which represents 23 percent of all travel purchased. The research firm projected the online market to grow to $91 billion in 2009, which would represent 33 percent of travel purchased.

Other research outfits are equally as bullish on the online travel market. For example, AOL cited Forrester Research forecasts that online sales will hit $119 billion by 2010, up from $52 billion this year.

As more travel sites rush their wares into the marketplace to meet that online booking interest, search engines are becoming a critical part of the marketing mix, Jupiter added. That's where Kayak, and now AOL, are looking for a sweet spot.