Hotelsbycity acquisition rumour (started by Google)

I learnt a long time ago to trust Google search traffic as a source of acquisition rumours. Search traffic to the BOOT hinted at both the Worldspan acquisition by Galileo/Travelport and the Asiarooms acquisition by TUI.

Now my traffic logs are picking up search traffic under the headings "hotelsbycity acquisition" and "hotelsbycity priceline". This is hardly definitive but is certainly enough to start a rumour that Hotelbycity is about to be acquired.

Hotelsbycity is a content/review site (with booking functionality) where consumers post real photos of hotels. Hotelsbycity combine all these photos into an almost room by room map of the hotel. I reviewed them back in January last year. My main comment was that the content was great (especially the jumping on bed PR campaign) but that booking did not work very well. The booking path has improved with support (in my search of San Francisco) of wctravel.com (ie Travelocity).

Anyone out there heard anything about a possible deal? Anyone from Hotelsbycity want to comment?

UPDATE - I cannot find an announcement by Priceline that this deal happened or a reference on the Hotelsbycity website that they are owned by Priceline. But Thompson Financial M&A are claiming that the deal happened in Jan 2008 for a price of CAD$4mm. In July 2008 Gavin O'Malle at Online Media Daily refers to the deal in an article about Travel Ad Network. PIrclien do have Hotelsbycity listed as a partner on their Priceline Parnter Network site but that is about it. Anyone out there know the real story???

Sidestep can't stay out of the news - what will be next

Sidestep seemed very comfortable for a long time being a pure meta-search company (is arguable that they invented the model). The economics were simple - buy traffic from GYM (Google, Yahoo, MSN) cheaper than you can sell it to advertisers who will come to the site because you can deliver highly qualified traffic. However somewhere something started to break in the model, most likely this was that PPC costs for the best of the travel keywords were becoming too expensive. Traffic had to be acquired in cheaper ways. So Sidestep has gone on and acquisition and content deal blitz-a-thon.

The latest is today's announcement of the acquisition of travel social network TripUp (here is the paidContent story). TripUp has all the usual features of a social network around travel - reviews, videos, photos, community, interest matching etc. What it does not have is a way to search and book travel.

Rolling up all Sidestep's recent activity now they:

• own a social network;
• own a blogging/review platform (Travelpost);
• have a content deal with Frommers;
• have a blog content feed from RealTravel; and
  
• another round of financing banked.

That means content, distribution, meta-search and money. There are also very strong confirmed rumours of profitability.

So what is next for them? Not sure if it is time yet for a sale. To extract the most from their valuation they probably want to have a longer period of earnings growth. But I expect them to continue with content and distribution acquisition through either buying more companies or further licence and affiliate deals. On the product side there is more international expansion to do. I am also sure they are contemplating more in the area of video and photos (Hotelsbycity for example). To round off the speculation, what about a technology buy. Something that would improve their ability to push contextual deals in automated forms - think Google Adsense but for travel deals.