LOS ANGELES (Reuters) - A wave of consolidation is headed for the Internet travel industry, and many fledgling search sites will not survive due to a glut of companies doing the same thing, the chief executive of travel search site SideStep said on Monday.
“We’re going to look at acquisitions,” Rob Solomon said at the Reuters Hotels and Casinos Summit 2007 in Los Angeles. “We think there’s going to be consolidation in our space.”
The sites that survive and thrive will be the ones that establish name recognition, said Solomon, who was named CEO in January 2006.
Privately owned SideStep, which was established in 1999, searches more than 150 Web sites — including online travel agencies and supplier sites — for pricing information on hotel and transportation. The company draws its revenue from advertising fees and boasts up to 5 million users per month.
Travelers use SideStep to select a vendor, and the site directs the user to another site to make the purchase. Through SideStep, travelers may arrive at a supplier site or even at a competing full-service online travel agency like Expedia Inc. (EXPE.O) and Priceline.com Inc. PCLN.O.
SideStep’s future is unclear, Solomon said. The company soon will face the decision of whether to be part of a merger or acquisition or become a publicly traded company.
“We are not sure which path we will take,” he said, adding that SideStep is not currently for sale.
But in the next 18 to 36 months, the company expects to reach $100 million in revenue and margins of 30 percent to 40 percent, targets it would like to hit for an initial public offering.