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Kayak Acquires SideStep

Thanks to a massive round of funding from a variety of investors, online travel site Kayak acquired rival SideStep for $200 million. The two-part deal sees Kayak raising an additional $196 million from existing investors Sequoia Capital, General Catalyst Partners and Accel Partners, new investors Oak Investments and Lehman Brothers Venture Partners, and debt lenders Silicon Valley Bank and Gold Hill Capital. Kayak will then use the money to purchase SideStep.

The companies have swiftly become the leaders in the discount travel search market. Kayak reportedly does around $50 million a year in revenues, while SideStep brings in $35 million. In their joint announcement, the companies said there is less than a 10 percent overlap between their users.

CEO Rob Solomon is credited with the remarkable turnaround at SideStep over the last two years. Solomon, a former Yahoo exec, replaced 40 of the company's 50-plus employees when he arrived in 2005. Under his leadership the company has grown its revenues from $14 million in 2005 to the expected $35 million this year. Nevertheless, Solomon is expected to leave his post after a 60-day transition period.

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