Kayak Software Corp. filed to raise $50 million in an initial public offering of stock, even as it urged Congress to challenge Google Inc.”™s acquisition of a key online travel software company.
Norwalk-based Kayak did not immediately state the exchange under which it plans to offer its shares.
Kayak revenue totaled $128 million in the first nine months of 2010, up by nearly half from the period in 2009. The company recorded $6.2 million in profits in the first three quarters, down from $10.4 million a year earlier.
Kayak”™s services are free for travelers, with the company earning revenue from steering website visitors to some 300 travel suppliers and online travel agencies, including its Norwalk neighbor Priceline.com Inc.; as well as via advertising on its websites and mobile applications. Travel suppliers and online travel agencies like Priceline pay Kayak on a set “cost per click” at the time of referral; as a “fixed cost per acquisition” if the user eventually completes a sale; or as a percentage of a transaction”™s value.
In the first three quarters of the year, Kayak”™s “meta search” business processed some 469 million queries for travel fares, up 37 percent.
“I think the (travel) suppliers have mixed feelings about empowering that channel, ”¦ about to what degree that they”™re willing to pay,” said Jeff Boyd, CEO of Priceline, in a November conference call with investment analysts. “Kayak has been very successful in building its meta search business for airline tickets.”
The company was founded in 2004 by veterans of Orbitz, Expedia and Travelocity, and after adding 40 workers in the past year has 140 employees today, including its 42-year-old CEO Stephen Hafner whose compensation Kayak did not immediately detail in its IPO filing.
Hafner holds 3.1 million shares of Kayak stock, a 9 percent stake. In 2008 and 2009, Hafner took $1.6 million in loans from the company, secured by shares of Kayak stock; as of last March, he had fully repaid those loans with interest.
Kayak operates in just 6,000 square feet at its Norwalk headquarters under a lease that runs through August 2013, and has a technology facility in Concord, Mass., as well as a West Coast sales and engineering office in Sunnyvale, Calif. Kayak is in the process of opening a European headquarters in Zurich, Switzerland.
Orbitz accounts for more than 40 percent of Kayak”™s revenue, while Expedia and its affiliate websites Hotels.com and Hotwire account for another quarter of sales.
Google Inc. makes up another 15 percent of sales, and Kayak stated in mid-November it is in negotiations with Google to renew its contract that expires at yearend.
Even as it does so, Kayak asked Congress to intervene in Google Inc.”™s $700 million acquisition of ITA Software Inc., which it says would squelch competition in the industry.
