Tuesday, July 15, 2008

Expedia buys Venere.com news at 11

Am on the blacberry so no details to give but announcement is clear. Expedia has bought the Italian dominant Venere.com. First foray of EXPE into the retail model and it must multiply their Italian biz by 3-5 times. More as details come through.


Caron said...


chuck said...

Very Interesting Tim.
It was time to see the european market move a bit.

Booking and Lastminute must be wondering what the exact deal is all about (Besides the fact of seeing PCLN and TVLY values drop tomorrow).

At least on the behalf of Expedia you must reckon they are trying to regain some market share and nasdaq valuation.

Future will say if it's a good deal as besides Italy Venere is not in the top players (except some occasional big european cities).

Let's wait for the synergies.

At the same time owners and capital investors of Venere must be celebrating as if they had won the european championship ;)


Lou said...

I seriously doubt that Venere is dominant in Italy...it was.

Actually EXPE is dropping and for this exact reason!
My opinion is that Expedia is loosing market share and traffic since 2 years, especially in Europe. Now they get Venere, a declining company. It looks like a desperate move...and the market got it!

Caron said...

Market Scan
Expedia Finds Its European Holy Grail
Lisa LaMotta, 07.15.08, 6:

Expedia has no problem dominating the U.S. market, but now the travel booking company wants to take over another, more premium part of the globe; the waning U.S. economy is just extra incentive to expand.

As the U.S. economy continues to deteriorate American businesses flock to Europe, hoping to offset lagging domestic markets. The U.S. business climate has been a particular bane to the hotel and hospitality industry, which has seen tough times due to higher gas prices and climbing airline fees.

The latest company to broaden its horizons is Barry Diller's Expedia (nasdaq: EXPE - news - people ). The online travel booking site, formerly part of the IAC/InterActive Corp. empire, announced on Tuesday it is acquiring Rome-based Venere Net from Advent International. Venere Net is a hotel-booking Web site like Expedia that has relationships with more than 26,000 hotels across Europe. The deal is dependent on regulatory approval in Germany and the transaction's details weren't released.

"(Venere.com) will immediately expand our supply footprint in Europe, the Middle East and Africa, and enable Expedia to diversify our business model approach to hotel partners worldwide," said Expedia President Dara Khosrowshahi.

High prices in the U.S. are pushing travelers to look for discounts in airfare and lodging, ultimately increasing the traffic to travel sites like Expedia. Yet, the increase in bargain hunters is not enough to offset the downturn in travel by Americans.

Shares of Expedia dropped dramatically in morning trading before recovering later in the day. The stock was up 26 cents, or 1.4%, to close at $18.41. Expedia's competitor, Priceline.com (nasdaq: PCLN - news - people ) was down 3.8%, or $4.04, to $103.70 on Tuesday.

The biggest thing is trying to keep with Priceline," said Canaccord Adams analyst Dominic Lacava. "The 'holy grail' of hotels is getting into the European market because it's highly fragmented and they don't have a lot of chains."

Also impacted by high gas prices, other companies are looking to Europe. Earlier in the week, Harley-Davidson (nyse: HOG - news - people ) bought Italian firm MV Agusta to increase its European presence with sportier, premium motorcycles and offset a downturn in its U.S. sales. (See "Harley Gains Italian Flair")

Caron said...

So Lou, as you can see...the market went up after the purchase and I am wondering if you work at Booking?

Chuck if you look at the Forbes report I have posted, you'll see that at the end of the day...stocks were up!

Venere.com has more then just the Hotel EU accomodation content that was needed, but also the B&B's and Hostels throughout the EU (24,000 of them). At the end of the day, booking should be worried.... as Expedia is on the move in Europe and will not only catch up to booking but will move past them on the way up!

Lou said...

Hi Caron..not working at bookings...
I was just referring to the article on Hotelmarketing "Wall street not supporting expedia's shopping trip to Italy" and today PCLN is +8,4%, EXPE +1,3.

Anonymous said...

yet, booking got far better SEO and PPC systems than EXPE.

Caron said...

For now my friend! For now, welcome to the world of Expedia!

Caron said...

Let's look back at the recent history of the hotel booking engine Venere.com.

Venere was founded in Rome in 1995 by 4 friends and entrepreneurs (Gianandrea Strekelj, Matteo Fago and 2 others I haven't yet found)

Advent International is an international private equity company that believed and invested in Venere back in November 2006 to gain 60% of the company shares. This was helped by the exit of first investor Kiwi II who use to have 33% of shares back in 2000. The remaining 40% was still in the hands of the 4 founders.

Advent International and Venere decide in February 2008 to acquire for a undisclosed sum a serious competitor in Italy, WorldBy.com. This move was justified to enhance Venere portfolio of hotels by an increase of 6,000 properties with 2.5 million registered users. Worldby is also a model in terms of bringing quality pictures to the end consumer.

Today, Venere has access to 29,000 properties that use the booking engine extranet to load rates and availability. Their model is retail meaning the consumer book on Venere and pay the hotel directly at the end of his stay. Then the hotel has to pay a commission to Venere (which is probably between 10 and 15%).

With this acquisition, Expedia has enlarged their hotel offering by 10,000 properties (after de-duplicating for properties already working with both Expedia and Venere). Content is gold, certainly when you have inventory loaded on your system and where you are maybe weak in certain countries (Italy maybe).

Having said that, the model of Venere is totally different from Expedia model. Expedia is on a merchant model where consumers pay Expedia at the time of the booking and comes to the hotel with a pseudo voucher.

It would be interesting to see in the future how Expedia is going to merge Venere content in Hotels.com and all their Expedia sites. How not to confuse the consumer where 2 models are clearly different? It's probably too soon to say at this stage.

At this stage, I would say Venere team will be alright for 1 year and will keep doing what they do best. Then, I won't be surprised if we start to see some shift in management, reduction of staff and consolidation of contracting and account management team. It is inevitable. Unfortunately. Time will tell...

And oh, I have forgot the most important reason why I think Expedia has bought Venere.com: to re-gain market share against Booking.com and please Expedia Inc shareholders. Hotels is where you make some money (commission, mark up, better yield, ...) not Air anymore. Apparently Expedia Inc. shareholders agree with this move.


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Anonymous said...

Priceline's International now has more sales than Expedia Europe - official! Q2 results out yesterday show Priceline still growing at 80% and Expedia at 30%, so they will overtake Expe outside the US very soon.

Anonymous said...

...the other two friends are : Renata Sarno and Marco Bellacci, last CEO before Advent Int.

A question: why Advent is out Venere after only one year (Nov-06 == Feb-08) ?

(Closing on July-08 but negotiation started before gen-08 feb-08)

Andreya padty said...
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