TechCrunch is reporting that Kayak will announce tomorrow it has raised $200 million to purchase Sidestep for $180 million in cash from the VCs funding both organizations.

I wanted to pass on our congratulations to Steve Hafner and his team at Kayak, and the shareholders over at Sidestep, for this move. The deal appears to value the new entity slightly north of $450 million. TC is reporting the new entity will have combined revenues of $85 million - assuming 15% margins, this equates to a P/E of about 35, which seems reasonable for the emerging market leader in a growing industry. According to TC, the new company is also taking on some debt to improve its ROE for shareholders, a seemingly wise move as the company appears to have some healthy cash flow to service interest payments.

I think this deal is further market validation of the meta-search model that VibeAgent utilizes and which consumers and travel suppliers alike increasingly prefer (see PhoCusWright’s latest research showing OTA hotel market share declining to 40% of total online bookings in ‘06 at the expense of travel supplier sites selling direct).

With meta-search, consumers get to view prices from multiple sites all in one place, so they know they are getting the best available rates, and suppliers get to maintain control over customer acquisition while increasing their margins (they pay sites like Kayak a CPC or CPA fee to drive customers to their sites directly, which is much lower than selling inventory at deep discounts to Expedia and others).

Of course, market consolidation brings new opportunities, and we look forward to taking advantage of those opportunities for the benefits of our users and shareholders in the coming months and years.

Once again, congrats to Kayak and Sidestep. This is an exciting day in the industry.

I’m very pleased to share with you the news that Dennis Ortiz has joined our team as our new Vice President of Marketing.

We’re thrilled to have someone of Dennis’ passion, drive, and industry experience on board. Dennis - welcome to VibeAgent!

Please see our official press release on this news below:

VIBEAGENT ADDS PRICELINE VETERAN TO MANAGEMENT TEAM

Dennis Ortiz joins VibeAgent as the new Vice President of Marketing

Charlottesville, VA, Friday, December 7th, 2007 – Continuing to build upon the momentum generated from the successful launch of its web site three weeks ago, VibeAgent.com is adding a veteran of the online travel world to its management team. Dennis Ortiz joined VibeAgent this week and will become the young company’s Vice President of Marketing. In this position, Mr. Ortiz’s responsibilities include developing and executing VibeAgent’s marketing strategy to help grow VibeAgent’s user base, review content, and hotel bookings.

Mr. Ortiz joined priceline.com in 1999, and as Director of Vacation Packages was responsible for revenue management and private-label partnerships. Prior to this appointment, Mr. Ortiz was the company’s Hotel Product Manager, and was instrumental in the development and international expansion of the company’s flagship Name Your Own Price™ hotel product.

In addition to his work at priceline.com, Ortiz has been a management consultant at Deloitte Consulting and worked in brand marketing at Kraft Foods. Mr. Ortiz holds an MBA from The Darden School of Business at the University of Virginia and a BS in Hotel Administration from Cornell University.

“We’re all very excited to have Dennis join our team. He’s a perfect fit for us. His passion, drive, and relevant industry experience ensure Dennis can have a significant impact from day one in helping VibeAgent achieve its ambitious goals for the future,” said Adam Healey, VibeAgent’s co-founder and CEO.

PhoCusWright, the leading travel research firm, estimates that online hotel bookings will total $86.6 billion in 2007 and grow by 20% in 2008. VibeAgent improves the hotel research and booking process by being the first site to offer travelers free personalized hotel recommendations, for more than 120,000 hotels, based on the content and connections within a traveler’s social network. VibeAgent then “meta” searches a multitude of travel and hotel web sites in real-time to find all the available room rates for each hotel, so users know they are booking their chosen accommodations at the best available rate.

About VibeAgent Inc.
VibeAgent.com is a new online resource for travelers to research and book hotel accommodations. It is the first and only site that combines user-generated hotel reviews, meta-search, and social networking to provide its users with free personalized hotel recommendat ions and booking at the best available rates. VibeAgent’s unparalleled meta-search engine assembles rates and availability for more than 120,000 hotels worldwide from leading sites and providers such as Priceline, HotelBook, InterContinental Hotels, Holiday Inn, Skoosh, Reserve Travel, Venere, Booking.com, Crowne Plaza, Staybridge Suites, TravelWorm, and Travel Intelligence. Founded in 2006, VibeAgent is based in Charlottesville, Virginia. For more information, please visit www.vibeagent.com.