Priceline boosts its mobile biz with Kayak acquisition

Priceline said Thursday it will spend $1.8 billion to acquire Kayak, which went public only a few months ago after delaying an IPO since 2010. Priceline will pay $40 per share for Kayak, marking a 29 percent premium above Thursday’s closing price of $31.04 per share.

A quick look reveals only a few obvious synergies between the two companies: Kayak serves as an aggregator of ticket prices and other travel information, as opposed to Priceline’s “Name Your Own Price” strategy, and its U.S.-centric business will complement Priceline’s strength in international markets, particularly among European hoteliers.

But as The Wall Street Journal astutely points out, mobile appears to be a key factor in the acquisition. Kayak’s mobile app ranks tenth among Android travel apps and 12th in the iOS travel segment, while Priceline’s own travel app ranks 11th among both platform’s travel apps. I’d imagine there’s little overlap between the two mobile user bases because they operate two distinct business, even if they both deliver results for travel searches. So Priceline seems to be betting that mobile will play an increasingly larger role in how users shop for the best (and most relevant) travel fares. And while it’s paying a premium, it appears to be a pretty good bet.