Kayak's Hafner on Tech Integrations, Terrorism Impact (Audio)

picture for stocks. Right now, Right now, we have got the Dow Jones Industrial Average hired by eight points, up less than point one percent to eighteen thousand, five hundred forty one, SMP five hundred index down five to sixty one, a drop there of point two percent, and Nastacktown twenty one points, a drop of four tenths of one percent. The tenure of eight thirty seconds, the yield one point

five five percent. Gold up three twenty ounce thirteen thirty two fifty on gold again there of two tenths of one percent. West Texas Intermediate crewed down five tenths down to fifty five cents. It is down one point two percent. W T I now forty four sixty nine barrel. I'm Charlie Pellett, and that's a Bloomberg Business Flash. Thank you, Charlie Pellett. The online travel business it generates more than five hundred billion dollars a year, and one of the

largest of the online operators is Kayak. Earlier today, I got a chance to sit down with Steve Haffner. He's the chief executive and co founder of Kayak. We spoke about new technology innovations, terrorism, the zeke of virus, how they affect travel, and also why they chose the name Kayak when they began the company. Well, we were building a very different company when we started in two thousand four,

so we wanted a very different name. So we we had a bunch of bunch of capitalists who were suggesting we should go by a name like Cheaper Travel or Cheaper flights or travel dot com, and my co founder, Paul English and I decided we wanted something different. So if you think about the research out in the web, there's a lot of studies of say that if you have six letters or fewer, you get more direct naff so people will type your name in direct navigation. Yeah,

so I think Google, think Yahoo, think Amazon. So we wanted six letters or fewer. We liked Kayak because it's a palindrome. You can spell it backwards and forwards. It connotes being self powered and independent, and it just made a smile all right, it made you smile. I guess another thing that made you smile. Fast forward is the one point eight billion dollar acquisition in two thousand and thirteen by the price Line Groups. So right, so tell

us about that. Yeah, it was interesting. We we had spent a number of years building the company and we finally had survived the Facebook I P O. Winter and taking Kayak public itself, and it had been public for about three months when Jeff Boyd, who was the CEO of price Line at that time, approach just over a labor day weekend and said, hey, you know we should

we should put these two companies together. And that commenced a series of talks without investment bankers, and we wrapped up a deal a couple of days later, um for the list price as one point eight billion, but actually when the smoke all cleared as more electree and a half three and a half billion, because they assumed a lot of debt as well, I believe now we I mean they issued a lot of shares in order to be Yeah, we're fortunate that between the time we announced

the deal and we actually closed it, price Line stock doubled in value and we have taken two thirds of the consideration in stock meta search. Whenever I look up Kayak and want to learn more about what the company does from a technical perspective, I keep hearing this term meta search. What does that mean? Sure, so Kayak is different than every other travel side or app out there, and that we're not actually a store. We're not selling you anything. What we do is we search everyone who

does sell something. So we search all the airline sites, all the hotel sites, all the online traveling sites. Because what we're trying to do is for a consumer, is give you a complete picture of what's available out there, and once you find the trip that you want, we give you choice on where to buy it. If you want to buy it from American Airlines, will help you there. If you want to buy it from Expedia or Priceline,

will help you get there too. You're engaging with a voice activated interface with Amazon's Alexa as well as the Facebook messenger app that that you're interfacing with him. You know, looking at you hear about the same demographic I am, which is you know, when we are coming off through the ranks, we would talk to an offline travel agent. You know, you you meet with someone to plan your trip to go somewhere. And in our generation we saw

all of that go onlines. We got used to using browsers and going to websites and filling out forms and getting our own requests. Well, increasingly you have this new generation of people and I see in my teenage girls who don't like going online at all. You know, they're they don't like voice actually, they like to talk to machines, not to other people. They like to text with folks.

And what we're trying to do with Kayak is have an interface that speaks to that whole generation, so that if they're more comfortable asking Siri for a flight quote from l A to New York, that Kayak can provide

that answer. If they're more comfortable during during their Facebook Messenger or um Slack, if they're in a business environment, Black is that online chat app for businesses exactly exactly that they can say, Hey, UM, can you give me a room tonight at the Ritz Carlton here in New York and we can fulfill that request in a very frictionless way. But what about the technology behind that? I

mean this is not full proof. I mean, voice activated commands are relatively new for consumers there's a reason it hasn't been done until now, right because the technology wasn't there. And also you have to have tremendous scale in terms of consumer requests for information so that you can start building a machine learning platform that gives you accurate answers. So a Kayak, for example, we'll do over a billion requests for consumer travel information this year, and in that

billion requests, we can start to ascertain patterns. Right. So if if someone says I'd like a hotel in New York tonight, we know that's New York City, not upstate New York. If they say Paris, we can look at their locations say are they meaning Paris, France or Paris, Texas. What would Kayak say if the user spoke to Amazon Alexa and maybe even went online and said I want

a travel they ation, but I'm afraid of terrorism. What would it come back and say, it's been interesting after this interview, I'm gonna go ask and see what response we have at But you know, in general, no one in the travel business likes terrorism because it does two things. The first thing it does is it suppresses consumer demand because you're scared to go somewhere. Have you seen that in any we have seen that. We have seen that,

particularly after the Paris attacks. The second thing it does is interduces more friction, more hassle into the actual travel experience, longer security lines, you no longer um checks, etcetera. So it's not something that that we like to see. Um. You know, I suspect I would hope if you ask that question into Kayak via Alexa, that we suggest some

spots that are terror free. Alternative accommodations I'm thinking here of air B and B. On one of the price Line Group conference calls, chief executive talked about four hundred thousand alternative accommodations that were available. Do you see Kayak participating in this alternative accommodation world? Absolutely? You know, our mission is the show consumers a complete picture of everything's available, whether that's flights, hotels, non traditional accommodations, or rental cars.

And we've got that content on Kayak. So we've got over a million options for places to stay, including people's apartments and trailer homes and all that kind of stuff. What about the restaurant, tour and activities comparison that has been introduced as a new feature for Kayak it's it's funny.

Every three years or so we look at expanding the scope of our activities to other verticals that are right for what you know we talked about earlier being meta search activities is something that I think is is ready. So we've we've launched that restaurants. We have a sister brand in the Pricelon group called open Table, which is very popular, and they've been kind enough to lend us some of their data and we're developed developing an interface

on top of that which should debut shortly. So you know, in general, we we love to have users have Kayak on their phones and have that Kayak app, helping, book plainting, get some hotel rooms, give them things to do, suggestions on restaurants, et cetera, and also to comparison shop. Of course, that's where it all starts. You started a test. Maybe you can give us an update with something called blue kayak uh dot com and that was available to so far users and I'm wondering what that was all about

and what you learned from it. That's interesting that you stumbled across that from good, good research. So look at Kayak. We are um experimenting with all kinds of different looking fuels of the West Side and features and blue Kayak was one of our tests. You know. What we did. We looked at a company called booking dot com, which is an online travel agency also and by the price Line Group, and we said, if we made our website look exactly like their's, um, what would the user engagement

and interaction be? And what we found is that our version of kayak is superior to their version of kayak and when we retired that test. But you know, in general, anytime you go into kayak, there's gonna be a couple hundred different permutations of kayak running. So what you see today be very different from what you see tomorrow. Let's go back to travel trends for just a moment, because the Olympics is scheduled for Brazil. What if you've seen

in terms of interest. It's funny. The interest is definitely definitely there to go to Brazil, but it's not the zeke of virus. Yeah, but it's not at the similar levels that we've seen in the past. Um. You know, it's the search query volume to Reel for example, it's up significantly year of year, but it's not up to the same level that we saw with the World Cup,

which was in the same location. So I don't I don't know whether that's because of political turmoil they're there, or because of the Zeka virus, or because of concerns of infrastructure, but it's it's definitely not where we like

it be. Steve Hafner is the chief executive and the co founder of a Kayak, talking about trends in the travel industry and worldwide online booking via these suppliers accounted for close to sixty percent of the total online bookings and markets such as ASA Pacific, Western Europe, and the United States. UH they account for about eight percent of the global online travel market. Price Line Group, the parent

company of Kayak. The shares right now they are higher by four and a quarter percent so far this year. Today they're down nine dollars and eighty four cents trading a thirteen hundred and thirty one dollars a share. Coming up on taking stock, We're going to take stock of the Justice Department. It's close to challenging anthems proposed acquisition

of Signal Corps and etna's planned combination with Humana. Anti trust lawsuits against the plan mergers would be the culmination of concerns that the Justice Department has about both deals that they set out from the onset. The year long review of the mergers, well, the department skepticism has yet to subside. You're listening to taking stock. I'm pim Fox right now SMP five hundred, down about a order of a percent, lower by four and a half points, trading

at twenty one sixty two. This is Bloomberg h