Priceline Group, Inc. (NASDAQ:PCLN)

CAPS Rating: 3 out of 5

Offering services from airline tickets to hotel rooms to car rentals, allows buyers to name their own price.


Player Avatar adamlevy (74.48) Submitted: 11/9/2012 4:35:29 PM : Outperform Start Price: $629.10 PCLN Score: +25.33

The planned acquisition of Kayak will prove to be a huge positive for the company. First, the company adds a revenue stream through the biggest travel search advertiser on the internet. Kayak's organic growth is fantastic, and the company can improve those numbers with its strong marketing team. Moreover, Kayak improves the company's mobile presence, which was simply mediocre for Priceline, but is an area in which Kayak excels. Furthermore, Priceline can actually improve Kayak by expanding its hotel search which offers a higher margin than airfare, and expanding the websites global reach through Priceline's excellent European presence. Finally, Priceline will save a few bucks because they don't have to pay advertising fees to Kayak.

Aside from the Kayak acquisition, the company should stay dominant in the European hotel market even through tough economic times. European hotels are turning to Priceline to fill up rooms when they don't have enough organic traffic.

It's airfare booking should continue to compete well, and will likely be unaffected by the Kayak acquisition. It's unlikely the company will try to funnel additional users through

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