Kayak raises its funding to a total of $30M, with another $11.5M of cash from Accel. Kayak's press release notes that they'll be using their war chest for their upcoming marketing blitz and expansion into Europe. I'm interested to see how their advertising campaign turns out. Traditionally, the Travel Search Engines have relied on search engine marketing, PR, and word-of-mouth to drive traffic. Whether a couple of million dollars from Kayak can make a dent in the marketing power of Orbitz, Hotwire, Expedia, and Travelocity (I've seen/heard advertising from all of the above in the past month) remains to be seen. My hope is that the money that Kayak pours into the consumer's mind will legitimatize the entire travel search category. As a wise man once said, "A rising tide lifts all boats." More interesting in the deal is the suggestion of Kayak's European expansion. Mobissimo has been leading the pack in terms of sheer number of airlines searched; and SideStep has an extremely slick UK interface. My guess is that Kayak will need to simultaneously expand internationally and grow their domestic market to justify whatever absurd valuation they were able to wrest out of Accel (anyone want to take a guess?).
From a consumer perspective, it seems to me that Kayak has been stagnating 2006, compared to their watershed 2005. Kayak's been releasing a lot of features for Buzz, but I don't see Buzz taking hold as a product. Even with a Virgin Atlantic contest to entice people to create trip ideas, the number of trips is mediocre (only about ~5000 trips) and the content is usually sparse. Additions to the Hotel search are nice, but the interface is still very geeky-looking and not as pretty as most online travel agents. On the other hand, Mobissimo launched a very interesting activities search that allows users to search for places based on what they want to do. And SideStep released an awesome activities search that allows users to search for activities--like parasail rides and Las Vegas shows--at their travel destinations.
From my limited view into the business perspective, Kayak has made a couple of smart moves. Even though I distrust distribution deals, Kayak is the leader of the pack in terms of number and volume. More importantly, Kayak has been operating its own self-serve ad network for almost a year now. That asset could be very imporant, though it's hard to tell from the outside.
Overall, I think that any investment in travel search is probably good, since it's an active disruptive technology that's gaining legitimacy And, Kayak is a very strong player, which has grown from nothing to become a major player in less than 2 years. I'm sure there will be more on which to comment this summer!